The plan for a canal into Edinburgh was driven by the city's need for coal, as the city was limited to sources coming through the Port of Leith which made it expensive. Meanwhile Glasgow was thriving with its access to coalfields through the Monkland and the Forth & Clyde canals.

Plans for the Union Canal began in 1793 but cost was an issue. Several options were proposed, each with evaluations to the coal reserves along their routes. The Napoleonic wars affected funding and it wasn't until 1811 when a new survey was commissioned. By then Edinburgh was a confident financial centre with the largest planned city development in the world, the Edinburgh New Town.

Hugh Baird, an engineer on the Forth & Clyde Canal looked at the options and proposed a route from Fountainbridge to Falkirk that would join the Forth & Clyde Canal through a flight of locks. The respected Scottish engineer Thomas Telford gave it his seal of approval saying it was

"the most perfect inland navigation between Edinburgh and Glasgow"

Baird's completely level route was called The Mathimatical because it followed the 240 ft contour line. Without the need for canal locks, it meant the route was cheaper to build and faster for canal traffic. It was the last canal to be built in Scotland, demonstrating the peak of canal engineering.

Work began in March 1818 and took four years. The construction was as controversial as major road building today. Once open horse drawn scows (large open barges) plied into Edinburgh full of coal, timber, stone, brick, lime and farm produce. The coal prices in Edinburgh fell. The main cargo leaving Edinburgh was horse manure which was valued in the fields along the canal's route.

Travelling by canal was far more comfortable than along rutted roadways. Passenger boats took seven hours from Edinburgh to Glasgow and meals were even served on board. People also enjoyed taking day trips out of Edinburgh to Ratho and the Almond Aqueduct.

The canal's trade was relatively short lived as the railway between Edinburgh and Glasgow opened in 1842 and passenger services on the canal ceased by 1848. Commercial trade continued but by 1920 the canal was no longer used and infilling began at Edinburgh in 1921 followed by culverting sections for road and house building. It was officially closed as a waterway in 1965.

The Union Canal and Forth & Clyde canals were reopened between 2000 and 2001 through the £84.5m Millennium Link Project, which was the largest canal restoration in the UK at the time. The Falkirk Wheel is the 21st century new beginning and end of the Union Canal.