The construction of a tram system in Tenerife was first proposed in January 1897, due to a combination of increased trade, tourism, and the expansion of railways at the time. It was approved on 12 November 1898, and was supported by the Belgium consul. Originally intended to connect Santa Cruz with Icod de los Vinos, it was designed by Julio Cervera Baviera, and the concession was given to
Aleixes de Reus on 4 July 1899. The company Societe Anonyme des Tramways Electriques de Tenerife was founded in Belgium on 28 September 1899, and the construction of the system was by Belgian contractors. Construction started on 29 October 1899, with the first tracks laid in Santa Cruz in February 1900, which reached to the central station in La Cuesta on 2 August 1900. Leopold II of Belgium visited the tramway in 1900. The line opened on 7 April 1901. The manager of the 'Electrico' system was Nicolas Marti Dehesa. The system was named Tranvía Villasegura after Imeldo Serís, Marquis de Villasegura, who obtained the consessions to enable the construction of the tramway.
The system was electric-powered, with each tram having two 50 horsepower motors. The generating system was located in La Cuesta, and was open to public viewing. It had two direct action engines that drove the dynamos, and provided up to 200KW of power, with Green economizers and Tudor batteries, with a Koerting tubular refrigerator to cool condensing water. The garages and the office were co-located with the generating system.
An extension to Tacoronte was proposed in December 1900, and approved on 18 April 1904. Construction work started in April 1904, the inauguration was on 27th July 1904 (with Leopold II of Belgium present), and the tramline opened in 1905. A further extension to Orotava was proposed in 1905, but not constructed.
New tramcars arrived from Belgium in 1912. The Cabildo de Tenerife took over operation of the tramway on 12th April 1927, in order to upgrade the system and repair wear-and-tear, and additional tramcars arrived between 1931 and 1940.