Cable railways are typically built where the gradient of the route is so steep that a conventional rail adhesion train could not climb the track. Most commonly the cable is operated by a stationary engine, although other methods such as gravity or water-balance are also used.
Many cable railways connect to conventional adhesion lines at their top and bottom, allowing trains to be lifted from a lower line to a higher one. A specific type of cable railway is the funicular, which is a self-contained railway, unconnected to another line. This requires the loading and unloading of passengers and goods at both ends.
The majority of inclines were used in industrial settings, predominantly in quarries and mines. The Welsh slate industry made extensive use of inclines to connect quarry galleries and underground chambers with the mills where slate was processed .
Level tracks are arranged above and below the gradient to allow wagons to be moved onto the incline either singularly or in short rakes of two or more.
On the incline itself the tracks may be interlaced to reduce the width of land needed. This requires use of gauntlet track: either a single track of two rails, or a three-rail track where trains share a common rail; at the centre of the incline there will be a passing track to allow the ascending and descending trains to pass each other.
Railway workers attach the cable to the upper wagon, and detach it when it arrives at the other end of the incline. Generally, special-purpose safety couplings are used rather than the ordinary wagon couplings. The cables may be guided between the rails on the incline by a series of rollers so that they do not fall across the rail where they would be damaged by the wheels on the wagons.
Occasionally inclines were used to move locomotives between levels, but these were comparatively rare as it was normally cheaper to provide a separate fleet of locomotives on either side of the incline, or else to work the level sections with horses.
On early railways, cable-worked inclines were also used on some passenger lines, for example at Cowlairs in Glasgow.
The speed of the wagons was usually controlled by means of a brake that acted on the winding drum at the head of the incline. The incline cable passed round the drum several times to ensure there was sufficient friction for the brake to slow the rotation of the drum – and therefore the wagons – without the cable slipping.
At the head of the incline various devices were employed to ensure that wagons did not start to descend before they were attached to the cable. These ranged from simple lumps of rock wedged behind the wagon's wheels to permanently installed chocks that were mechanically synchronized with the drum braking system. At Maenofferen Quarry a system was installed that raised a short section of the rail at the head of the incline to prevent runaways. 
The operation of an incline was typically controlled by the brakesman positioned at the winding house. A variety of systems were used to communicate with workers at the bottom of the incline, whose job it was to attach and detach the wagons from the incline cable. One of the most common communication methods was a simple electrical bell system. 
Cable railways were often used within quarries to connect working levels. Sometimes a single cable railway would span multiple levels, allowing wagons to be moved between the furthest levels in a single movement. In order to accommodate intermediate levels, turnouts were used to allow wagons to leave and join the cable railway part way along its length. Various methods were used to achieve this. 
One arrangement used at the Dinorwic Quarry was know as the "Ballast" method. This involved a two track incline with one track reserved for fully loaded wagons and the second used by partially loaded wagons. The line used by the partially loaded wagons was known as the "ballast" track and it had a stop placed on it part way down. The distance from the top of the incline to the stop was the same as the distance that the fully loaded wagons needed to travel. Empty wagons were hauled up the incline, counterbalanced by the descending ballast wagons. These empty wagons were replaced by fully loaded wagons ready to descend. The descending loaded wagons then returned the ballast wagons to the top of the incline. One of the major inclines at Dinorwic had four parallel tracks, two worked by the ballast method and two as conventional gravity balance.
Cable railways are basically classified by the power source used to wind the cable.
A stationary engine drives the winding drum that hauls the wagons to the top of the inclined plane and may provide braking for descending loads. Only a single track and cable is required for this type. The stationary engine may be a steam or internal combustion engine, or may be a water wheel.
In a gravity balance system two parallel tracks are employed with ascending trains on one and descending trains on the adjacent track. A single cable is attached to both trains, wound round a winding drum at the top of the incline to provide braking. The weight of the loaded descending cars is used to lift the ascending empties. 
This form of cable railway can only be used to move loads downhill  and requires a wider space than a stationary engine -driven incline, but has the advantage of not requiring external power, and therefore costs less to operate.
A variation of the gravity balance incline was the "tank" incline found at several quarries in north Wales, notably the Dinorwic Quarry. These were worked by gravity, but instead of the wagons running on their own wheels, permanently attached angled wagons were used that had a horizontal platform on which the cargo-carrying wagons rode. Despite their name, these inclines were not a form of water balance incline. 
This is a variant of the gravity balance incline that can be used to move loads uphill. The weight of the unloaded descending train is increased using water until it is greater than the train travelling uphill. At this point gravity allows the uphill train to ascend. The water is either carried in an additional water wagon attached to the descending train, or is carried in a platform on which the train descends.
This form of incline has the advantages of a gravity balance system with the added ability to haul loads uphill. It is only practical where a large supply of water is available at the top of the incline.
An example of this type of cable railway is the passenger carrying Lynton and Lynmouth Cliff Railway.
An uncommon form of cable railway uses locomotives to power the cable. The cable is attached to a locomotive, usually at the upper end of the incline. The locomotive is driven away from the head of the incline, hauling wagons up the inclined plane. The locomotive itself does not travel on the steeply graded section.
This is most commonly used for a temporary incline where setting up the infrastructure of a winding drum and stationary engine is not appropriate. It is similarly employed for recovery operations where derailed rolling stock must be hauled back to the permanent track.