Moelwyn Quarry was originally opened in the 1820s from several small levels on the eastern face of Moelwyn Bach. The development and linking of Moelwyn Mawr and Bach quarries by incline at Cwm Stwlan was an attempt by the banker Baron Rothschild to lay claim, on behalf of the Crown, to the mineral wealth of the Principality. Rothschild successfully delayed the granting of an Act of Parliament for the building of the Festiniog Railway for eight years from 1824-32. However, by 1840, he had sold his Moelwyn Quarry and, through the Rhiwbryfdir quarry of his Welsh Slate, Copper and Lead Mining Co., become a privileged customer of the Festiniog Railway further up the line.
In the 1860s it was developed underground on the southern flank of Moelwyn Mawr. Active in the 1870s and again in the 1890s, it closed about 1900.
In the early 1860s the quarry was connected to the Festiniog Railway by the spectacular incline system, which remains today (though is broken at Cwm Stwlan, site of Stwlan Dam).