The Healesville Rail Tunnel, constructed 1888, has high local significance as an important part of the Lilydale-Healesville Railway Line, which was extended to Healesville by 1889. The construction of the tunnel was a difficult engineering achievement in which the tunnel caved in twice and a number of navvies were killed or injured. The line gave a great boost to the towns of Healesville and Yarra Glen and to the district's timber and other industries, and brought an influx of tourists to the area. The tunnel continues to be a well known local landmark with social significance for the Healesville community.

A brick-lined railway tunnel is located through a hillside, known as "Tunnel Hill", approximately three kilometres along the railway line west of Healesville. The bricks on the face of the western entrance of the tunnel are red and appear to have been machine made. Forming a lintel above the arched entrance to the tunnel are two lines of roughly finished basalt blocks separated from each other by brickwork. The bricks lining the interior of the tunnel are more orange in colour and appear to be older than the red bricks. Considerable mineral accumulations, including lime from the walls and ceiling of the tunnel and soot from the train, have stained the brickwork inside and outside the tunnel.

The tunnel is thought to measure 130 metres in length. Rails run through the tunnel, but the line's sleepers are in poor condition. A tourist railway runs from Healesville to the eastern entrance of the tunnel, not going through the tunnel, or continuing to Yarra Glen.

The western entrance of the tunnel can be seen from several points within the grounds of the Tarrawarra Winery, and the eastern entrance is likely to be accessible from the Government Road (which is leased to the Tarrawarra Winery).

Like the many trestle bridges located on the line, the tunnel represents the significant engineering challenges posed by the construction of the line.

Physical Conditions: Fair

Integrity: Intact