The canal was first suggested in 1767 as a way to link east and west coasts; the River Mersey in Lancashire and the River Aire in Yorkshire.
The Leeds Liverpool Canal took the longest time to complete of all England's canals, 46 years, with interruptions due to wars with France in the colonies and arguments with other canal companies. It was started in 1770 and opened as a complete canal in 1816. It was one of three canals to cross the Pennines but unlike the other two it was never closed.

Before the canal was completed navigation and trade was possible on the River Douglas as far as Wigan. Slate, limestone and coal was traded on Mersey flats, river-going craft on which the later canal barges were based. Limestone was the most important cargo when the canal was first started. It was used to improve the fields and fuel the agricultural revolution in England. But it was fuel of another sort that really made the Leeds Liverpool canal successful: coal. Carrying coal by canal halved its cost. The cheap coal allowed industry to grow. The industrial revolution in England saw villages turn to towns and towns into smoke filled cities of dark satanic mills. The products of the mills and factories were sent across the British Empire. Cotton from the Americas came up the canal to the mills of Burnley, Blackburn and on to Manchester. Corn came to Birkenhead and then to mills at Burscough until relatively recently. Agricultural produce from the Lancashire plains could be sent to Liverpool and in return Liverpool sent tonnes of horse manure and night soil to fertilize the fields. Evidence of this can still be seen, the broken pottery in the fields and the overgrown cobbled wharves.

The Leeds Liverpool Canal Company bought up the River Douglas navigation to use its water supply and end its competition. This navigation was later replaced by the Rufford branch of the Leeds Liverpool. After much debate and many changes of plan the final route included a section of the Lancaster Canal. This section was intended to connect to the rest of the Lancaster canal by means of an aqueduct across the River Ribble. The aqueduct was too expensive to be built but there was a wooden tramway to take cargoes across the river from the Walton Summit transhipment basin to the Lancaster canal.  The company made made use of the geology its canal passed through. There were many quarries along the canal and the stone was used to build the locks and bridges. Near Barnoldswick was the Rain Hall Rock branch which was an arm of the canal going directly into a limestone quarry, an investment that made money when times were hard for the company. At Skipton there was another quarry at the Spring Branch by the castle. The main line of the canal was linked via the Leigh branch to Manchester and by the Bradford canal to the city of Bradford.

The canal was financially successful and didn't suffer with the coming of the railways like other canals did. Cargo was still being transported on the canal up to the 1960s.