Europe has an extensive number of tramway networks. Some of these networks have been upgraded to light rail standards, called Stadtbahn in Germany, premetros in Belgium, sneltram in the Netherlands, and fast trams in some other countries.
All the former communist countries of Central and Eastern Europe, excluding Lithuania, the Republic of Macedonia, Montenegro, Moldova and Slovenia, have extensive tram infrastructure. Industrial freight use of city tram lines was a widespread practice until 1960s but has since mostly disappeared. Another factor is an increasing replacement of trams with trolleybuses as cities face a rapid increase in traffic and such replacement often allows to increase road size. One of the exceptions is Warsaw, Poland, where the last trolleybus line was closed in the year 1995 due to high maintenance costs, and replaced with buses. Czech ČKD Tatra and the Hungarian Ganz factories were notable manufacturers of trams.
In recent decades, tram networks in countries including France, Germany, Spain and Portugal have grown considerably. The Netherlands, which already makes extensive use of trams, has plans to expand trams to two additional cities.
Germany did not undergo the tramway closure programmes that were carried out in other European countries and many cities retain their original tram networks. In some places, tram networks have been added or expanded through the introduction of hybrid tram-train or stadtbahn systems which may combine standard railway, on-street and underground operations. Notable examples include the systems in Cologneand Karlsruhe. In Frankfurt-am-Main, many tram lines were transferred to U-Bahn operation.
In the United Kingdom, investment in public transport in the late 1980s turned to light rail as an alternative to more costly underground railway solutions, with the opening of the Tyne and Wear Metro (1980) and the Docklands Light Railway in London (1987) systems. However, the first British city to reintroduce on-street tram-style rail services was Manchester, with the opening of its Metrolink network in 1992. Many other UK cities followed with their own tram-style light rail systems, including Sheffield (Supertram, opened 1994), Birmingham and Wolverhampton (Midland Metro, opened 1999), London (Tramlink, opened 2000) and Nottingham (Nottingham Express Transit, opened 2004). Many of these new systems are planning network extensions and several new tram systems are being proposed or are under construction, such as Edinburgh Trams, Belfast EWAY (proposed) and Liverpool Merseytram (proposed). Other tramway projects have not made it beyond the proposal stage because of funding problems, for example London's Cross River Tram and the Leeds Supertram.
Paris reintroduced trams with line T1 in 1992, and many French cities have seen a similar revival,for example the Tramway de Grenoble and the Montpellier trams.
The Czech capital Prague plans one new line and the extension of eight others between 2007 and 2016, with an official of the Prague Public Transport Company stating that "In Europe in the past 10 years, tram transportation is the preferred way of transit; we can say that tram transportation is going through its renaissance period".