The train started from Banihal to Baramulla as per schedule at 7.10 am, while a train from Baramulla to Banihal chugged off at 7.35 am, railway officials said.
The train is scheduled to make five trips daily, passing through an 11-km long tunnel, the country's longest.
The Udhampur-Banihal section of the Kashmir rail project is expected to be completed by 2017 connecting the Valley to the rest of the country round-the-year without any hindrance.
The 18-km link between Qazigund to Banihal which passes through the 11-km Pirpanjal tunnel was completed this year and was dedicated to the nation by the Prime Minister alongwith UPA Chairperson Sonia Gandhi yesterday.
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The tunnel has been constructed using New Austrian Tunnelling Method, which has been used for the first time on such a large scale in the country.
This method optimises the tunnel design by mobilising the inherent ground strength in adopting a curved section, providing primary support system immediately after excavation and monitoring the ground behaviour while permitting it to develop its inherent strength.
The tunnel has been made water-proof by providing continuous PVC membrane between primary and secondary lining.