Serving the village of the same name, this station was established as a crossing place for the opening of the south line in 1874 and was provided with a timber third class station similar to that which remains at Santon Station today, there also being one at Ballasalla Station until 1985. and in the earliest days at Port St. Mary and Port Soderick.

The example here housed all the station staff and featured a recessed shelter, it was removed in 1980 and the station left with no passenger accommodation until 1988 when the refurbished building from Braddan Station was erected.  The long passing loop is retained today, but the two goods sidings were lifted in 1974, one of which served a small goods platform 

The goods platform, which remains in the undergrowth today on the landward side of the up platform and not connected, was home to a grounded brake van body (from Manx Northern Railway van Er.8 after with was withdrawn and the frames reused) which was a store and survived in situ until 1974 when it was destroyed in situ having fallen into disrepair latterly.

The station now has an automated level crossing at its northern end, installed in 2013 as the latest new crossing and serving the access road to the new Colby Football Club and campsite beyond the station; this is activated by the train crews.  For many years the station has been without semaphore signals and is rarely used to cross trains.

Usually only the occasional photographic charter train uses the loop line, when two members of staff man the station, one on each set of points acting as flagmen in lieu of semaphore signals which have long since been removed.  Visibility from the southern approach is excellent as there is a long straight section to Kentraugh and beyond The Level and Ballagawne crossings.

Stations along the line were all fitted with bilingual running in boards from 2008 but those at Colby retain the single name, there being no Manx Gaelic translation of the word; similarly those at Port Soderick Station were different, there being only one letter difference (Port/Purt) though these have been updated since then to be in house style.  

The other exceptions are those at Castletown Station which have been replicated in an accurate period style without the Manx (Balley Cashtal) and Ballabeg Station, which similarly has a more traditional single language board since works were carried out by Association volunteers in 2021, this is in an effort to maintain a period feel.

When originally installed, the former Peel Line shelter had the running in board mounted on its roof, this has since been removed and four post-mounted signs are now featured at each end of both platforms, these have varied in style over recent years.  The two full-height platforms were installed in 2001 but the seaward side is rarely used.