Construction began in 1790, after Parliamentary approval was given. Construction was funded by the Merthyr ironworks owners seeking a means of transporting their iron to the sea.
The contractor for the project was Thomas Dadford, a pupil of the canal engineer James Brindley.
The Merthyr to Pontypridd section was completed in 1792, the Pontypridd to Cardiff section in 1794. The canal was completed in 1798 with the addition of a sea lock in Cardiff docks. The cost was £103,600.
The canal was around 25 miles long, with a drop of around 560 feet requiring 50 locks.
The shares in the canal were bought in 1883 by the Marquess of Bute.
The canal lost favour when the Taff Vale Railway opened. Today, few traces of the canal remain - chiefly bridges and tunnels.