Since 1982 KCRC has greatly expanded its network. In 1984 the Corporation accepted the Government's invitation to build and operate a light rail system in the North West New Territories. Light Rail commenced service in September 1988, initially serving the new towns of Tuen Mun and Yuen Long, and later extended to serve the Tin Shui Wai new town.

The 1990s saw the beginning of what would be a 10-year programme of major expansion. Construction of West Rail, which provides a mass transit rail service between Tuen Mun and Yuen Long in the North West New Territories and Nam Cheong in urban Kowloon, began in 1998 and was finally completed in December 2003. With the construction of West Rail, the original KCR line was renamed as East Rail.

Planning also began in 1998 on three extensions to East Rail. In October 2004 the opening of the Tsim Sha Tsui Extension extended East Rail southwards from Hung Hom to East Tsim Sha Tsui. In December of the same year Ma On Shan Rail came into service, serving the North East New Territories and enabling easy access to East Rail via Tai Wai Station. August 2007 saw the opening of the final extension, the Lok Ma Chau Spur Line, which provides a convenient second railway crossing for passengers to enter the Mainland at Lok Ma Chau.

Another project awarded to the Corporation in 2002 was the Kowloon Southern Link (KSL), which is a natural 3.8 kilometre extension of the West Rail Line from Nam Cheong Station to East Tsim Sha Tsui Station, with an intermediate station at Austin Road. Construction works began in August 2006 and the line opened for passenger operations on 16 August 2009. The KSL now enables passengers to conveniently interchange from West Rail to East Rail at Hung Hom Station.

The Corporation was responsible for fully financing the construction of the KSL, with the MTR Corporation Limited (MTRCL) being appointed as the KCRC's project manager for the works on the date of the rail merger. The KSL is now operated by MTRCL under the Service Concession Agreement. Also forming part of the KSL project is the purchase by the Corporation of 22 new Light Rail Vehicles, which are required to cater for the anticipated additional passenger demand for Light Rail services in the North West New Territories as a result of opening the KSL. These new Light Rail Vehicles are now gradually entering service, with all expected to be operational in the first half of 2010.

In June 2002, following a competitive process, the Corporation was awarded the bid to plan, build and operate the Sha Tin to Central Link, which when completed in 2019 will enable passengers to travel from Hong Kong Island via a new cross-harbour tunnel to Hung Hom and on to either Lo Wu or Lok Ma Chau without having to change trains. Following the rail merger in December 2007, the MTRCL took over responsibility for planning and design of the project.

Current plans envisage the Government financing the construction of the project, with works scheduled to commence in 2010 for phased completion in 2015 and 2019. The Government has indicated that upon completion of the project it may vest the railway in or lease it to the KCRC for a nominal amount. The Corporation would in turn be expected to include the railway into the service concession granted to the MTRCL and receive service concession payments.

Being the operator of cross-boundary and intercity services, the Corporation carried out the initial planning work for the Hong Kong section of the Guangzhou-Shenzen-Hong Kong Express Rail Link (XRL), which when completed in 2015 will enable high speed rail services to be provided between Hong Kong and Mainland cities. The Hong Kong section of the XRL is about 26 kilometres in length and its construction cost will be funded by the Government. The Corporation has already undertaken railway protection works for the XRL as part of the KSL project, so as to enable XRL trains to pass under the KSL to reach the XRL's proposed West Kowloon Terminus. The MTRCL took up further planning and design work for the XRL following the rail merger.