The locomotive was built in 1857 by George England and Co. of New Cross for the Sandy and Potton Railway, at a cost of £800. The railway was promoted by Captain Sir William Peel VC, whose estate lay between those towns, and the locomotive was named after his ship, the frigate HMS Shannon. In 1862 it was sold to the London and North Western Railway (LNWR) for shunting at Crewe Works and numbered 1104. It was renumbered 1863 in 1872.

In 1878 it was sold to the Wantage Tramway where it became No 5 and was known as 'Jane' although the name was never actually carried. It was initially fitted with full tramway skirts, but these were removed after a few years. After closure of the tramway in 1945 it was purchased by the Great Western Railway and the name 'Shannon' was reapplied. It was preserved as a static exhibit on Wantage Road railway station until that closed in 1964. In 1965 it was stored on the premises of the Atomic Energy Authority but in 1969 it was moved to the Didcot Railway Centre, where it was finally steamed and operated again in October 1969.

No. 5 Shannon is part of the UK National Collection of railway locomotives