In the mid-1840s, William Madison Peyton and others organized companies to mine cannel coal at Peytona on Big Coal River and at Manningsville on its major tributary, the Little Coal. It had been discovered that the oily mineral could be refined into coal oil, which was used for illumination. In 1849, the Virginia General Assembly authorized the development of plans for slackwater improvements to make the Coal River more navigable. Peyton, Henry DuBois, and other mine owners with assistance from the state established the Coal River Navigation Company and hired the future Civil War general, William S. Rosecrans, as project engineer. Construction began in 1855 with eight locks and dams eventually being built on the Coal River, creating slackwater navigation for 35 miles upstream to Peytona, Boone County. A single lock and dam was built on the Little Coal River.

Construction of the stone-filled timber-crib dams and 125-by-24-foot timber-crib locks was completed by 1859. During the first year of operation, 400,000 bushels of cannel coal was barged out of the river. In 1860, that amount was doubled. With the start of the Civil War, navigation on the river and maintenance of the locks and dams were limited. On September 29, 1861, one of the worst floods ever in the Kanawha River watershed caused great damage to the structures. The river reached 46.87 feet in Charleston, more than 16 feet above flood stage.

After the war the new state of West Virginia reorganized the Coal River Navigation Company, and repairs were made on the locks and dams. However, the market for coal oil for illumination was sharply reduced with the discovery of petroleum and the making of kerosene. By 1882, the Coal River locks and dams had been abandoned, and by 1900 little evidence of their existence remained.