The Alexandria Canal played a brief, but significant, part in the history of commercial navigation on the Potomac River. After the charter of the Chesapeake and Ohio Canal, which ran from Cumberland, Maryland, to Washington, D.C., Alexandria merchants proposed in 1830 that a canal be constructed linking their city to Georgetown. Congress granted a charter to the Alexandria Canal Company on 26 May 1830. Construction on the aqueduct bridge and canal began in 1833 and was completed a decade later. The Potomac Aqueduct Bridge, which spanned a 1000 feet between Georgetown and Rosslyn, allowed boats to cross the Potomac without first unloading in Georgetown. Boats would then continue their trips downstream on the seven mile canal leading to Alexandria's seaport. The canal officially opened on 2 December 1843 with the arrival of the first canal boat in Alexandria. In 1850, when the Chesapeake and Ohio Canal was completed to Cumberland, Maryland, coal from Maryland's mines became the most important commodity shipped to Alexandria along with wheat, corn, whiskey, corn meal, and flour. Important exports from Alexandria included fish, salt, plaster, and lumber.

The only interruption in service on the Alexandria Canal came during the Civil War when the canal was used to transfer Federal troops and supplies. But in 1886, a break in the aqueduct coincided with the demand for a toll-free bridge across the Potomac River and service on the canal came to an end. The canal structure was abandoned, and, finally, in 1923, the aqueduct bridge was removed. During the 1980s, Alexandria archaeologists discovered and restored the tidal basin and lift lock in Alexandria.