Sydney's underground railways do not form a true metro, because they are extensions of suburban main line services and are not a completely segregated system. However, the underground sections, especially the City Circle, show many of the characteristics of a metro, such as very frequent services. In this way Sydney's railways can be considered a hybrid system. The railways are run by CityRail, an agency of the government of New South Wales.

Because the original underground lines were built in conjunction with the construction of the Sydney Harbour Bridge, a decision was made to have the lines in shallow tunnels so as to minimise the height difference between the underground rails and their extension across the bridge.

Underground lines

Sydney has at present three main underground lines; a fourth is currently under construction.

• The oldest is the main city loop, the City Circle, which runs between Central, Town Hall, Wynyard, Circular Quay, St. James station and Museum stations. Central and Circular Quay are above-ground stations (Circular Quay is in fact elevated, directly underneath the Cahill Expressway), while the remainder are below-ground. The line to St. James station and Museum was opened in 1926, but Circular Quay was a "missing link" until 1956. The "western limb" of the City Circle through Town Hall and Wynyard to Sydney Harbour Bridge was opened in 1932.

• The second, known as the Eastern Suburbs line was opened in 1979. It runs between Redfern, Central, Town Hall, Martin Place, Kings Cross, Edgecliff and Bondi Junction stations. All these stations are underground, but there are three above-ground sections, two on viaducts and one in a cutting. Most of the platforms at Redfern and Central stations are above ground, including the platforms for the City Circle, but the Eastern Suburbs line is underground. There were plans to extend the Eastern Suburbs line from Bondi Junction to Bondi Beach, but the plans were opposed by Bondi residents, who feared large crowds flocking to Bondi Beach.

• The third underground line is the Airport Line, which opened in the year 2000, prior to the Sydney Olympics. This runs between Central, Green Square, Mascot, Domestic (underneath the Domestic terminal), International (underneath International terminal at Sydney Airport), and Wolli Creek. After Wolli Creek it joins the above ground East Hills line at Turrella.

• The Parramatta Rail Link is currently under construction. It will link Parramatta to Chatswood via Epping with new underground platforms at Epping and Chatswood, and new underground stations at Macquarie University, Macquarie Park and Delhi Road. The line was originally intended to be extended from Epping to Parramatta incorporating the existing Carlingford line, but this section has been postponed indefinitely.

There are also vague plans for a new underground line to extend from Epping to Castle Hill, and possibly later to the new development underway at Rouse Hill.

Disused tunnels

Sydney has several disused underground tunnels. The best known of these are those leading out of St. James station. As well as these, there are several disused tunnels and platforms on the Eastern Suburbs line, which like St. James station provided for the possibility four tunnels even though only two were ever built. Most of the stations have these disused platforms adjacent (but walled off from) the platforms currently in use. At Redfern station instead of platforms there is a big open pit in the ground, running from surface to subway level, which in 2000 construction personnel were busy building something in (possibly a car park). The never used platforms at Central are used to store the Archives of the State Rail Authority. Like St. James station, these stations have stub tunnels, although they are much shorter. They were used as scenes in filming the movie The Matrix.

It is possible to access the Redfern pit in the ground and disused tunnels by two ways — there is a hole in the wall opposite the used platforms where people climb in (the one through which sunlight and weeds are visible); it is also reportedly possible to enter the Redfern station stub tunnels from the Everleigh rail yards.

Even though they never were intended to be part of the subway system, one can also mention here the tunnels for the old Pyrmont goods line. One of these runs underneath Railway Square, between the Central station railway yards and the Powerhouse Museum; the other tunnel runs underneath Glebe. The first tunnel is no longer used. The old railway from the Powerhouse Museum to Lilyfield has been converted to form part of the Metro Light Rail line from Central station. The Glebe tunnel is on this section.

Also of interest is a tunnel connecting the Eveleigh rail yards on the southern side of the main line to the northern side of the main line, just past Redfern.