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Keene is entirely within the Connecticut River watershed, with all of the city except for the northwest corner draining to the Connecticut via the Ashuelot.Beginning in 1945, Keene was a stopping point for the Boston & Maine's streamlined trainset known at that time as the Cheshire. Nelson Blount chose the city for the site of his Steamtown, U. In 1978 the B&M leased switching operations in Keene to the Green Mountain Railroad, which took over the entire Ashuelot Branch in 1982.Passenger decline and track conditions forced the Green Mountain to end service on the Ashuelot Branch in 1983 and return operating rights to the B&M.However, there were no longer enough customers to warrant service on the line.
In 1984 the last train arrived in and departed Keene, consisting of Boston & Maine EMD GP9 1714, pulling flat cars to carry rails removed from the railyard.
Keene became a manufacturing center for wooden-ware, pails, chairs, sashes, shutters, doors, pottery, glass, soap, woolen textiles, shoes, saddles, mowing machines, carriages and sleighs. Keene was incorporated as a city in 1874, and by 1880 had a population of 6,784.