structural:reformatting, quality:correction
Revival

Dramatic increases in the cost of diesel fuel prompted several initiatives to revive steam power. However, none of these has progressed to the point of production and, as of the early 21st century, steam locomotives operate only in a few isolated regions of the world and in tourist operations.

As early as 1975, railway enthusiasts in the United Kingdom began building new steam locomotives. That year, Trevor Barber completed his 2 ft (610 mm) gauge locomotive Trixie which ran on the Meirion Mill Railway. From the 1990s onwards, the number of new builds being completed rose dramatically with new locos completed by the narrow-gauge Ffestiniog and Corris railways in Wales. The Hunslet Engine Company was revived in 2005, and began building steam locomotives on a commercial basis. A standard-gauge LNER Peppercorn Pacific "Tornado" was completed at Hopetown Works, Darlington, and made its first run on 1 August 2008. It entered main line service later in 2008. As of 2009 over half-a-dozen projects to build working replicas of extinct steam engines are going ahead, in many cases using existing parts from other types to build them. Examples include BR 72010 Hengist, BR Class 3MT No. 82045, BR Class 2MT No. 84030, Brighton Atlantic Beachy Head, the LMS 5551 The Unknown Warrior project, GWR " 47xx 4709, 2999 Lady of Legend, 1014 County of Glamorgan and 6880 Betton Grange projects. These United Kingdom based new build projects are further complemented by the new build Pennsylvania Railroad 5550 project in the United States. One of the group's goals is to surpass the steam locomotive speed record held by the 4468 Mallard when the 5550 is completed and for the 5550 to fill in a huge gap in steam locomotive preservation.

In 1980, American financier Ross Rowland established American Coal Enterprises to develop a modernised coal-fired steam locomotive. His ACE 3000 concept attracted considerable attention, but was never built.

In 1998, in his book The Red Devil and Other Tales from the Age of Steam, David Wardale put forward the concept of a high-speed high-efficiency "Super Class 5 4-6-0" locomotive for future steam haulage of tour trains on British main lines. The idea was formalised in 2001 by the formation of 5AT Project dedicated to developing and building the 5AT Advanced Technology Steam Locomotive, but it never received any major railway backing.

Locations where new builds are taking place include:

In 2012, the Coalition for Sustainable Rail project was started in the US with the goal of creating a modern higher-speed steam locomotive, incorporating the improvements proposed by Livio Dante Porta and others, and using torrefied biomass as solid fuel. The fuel has been recently developed by the University of Minnesota in a collaboration between the university's Institute on the Environment (IonE) and Sustainable Rail International (SRI), an organisation set up to explore the use of steam traction in a modern railway setup. The group have received the last surviving (but non-running) ATSF 3460 class steam locomotive (No. 3463) via donation from its previous owner in Kansas, the Great Overland Station Museum. They hope to use it as a platform for developing "the world's cleanest, most powerful passenger locomotive", capable of speeds up to 130 mph (210 km/h). Named "Project 130", it aims to break the world steam-train speed record set by LNER Class A4 4468 Mallard in the UK at 126 mph (203 km/h). However, any demonstration of the project's claims is yet to be seen.

In Germany, a small number of fireless steam locomotives are still working in industrial service, e.g. at power stations, where an on-site supply of steam is readily available.

The small town of Wolsztyn, Poland, approximately 60 kilometres (37 mi) from the historic city of Poznan, is the last place in the world where one can ride a regularly scheduled passenger train pulled by steam power. The locomotive shed at Wolsztyn is the last of its kind in the world. There are several working locomotives that haul daily commuter service between Wolsztyn, Poznan, Leszo and other neighboring cities. One can partake in footplate courses via The Wolsztyn Experience. There is no place left in the world that still operates daily, non-tourist steam powered commuter/passenger service other than here at Wolsztyn. There are several Polish-built OL49-class 2-6-2 general purpose locomotives and one PT47 class 2-8-2 in regular service. Each May, Wolsztyn is the site of a steam locomotive festival which brings visiting locomotives - often well over a dozen each year all operating. These operations are not done for tourism or museum/historical purposes; this is the last non-diesel rail line on the PKP (Polish State Network) that has been converted to diesel power.

The Swiss company Dampflokomotiv- und Maschinenfabrik DLM AG delivered eight steam locomotives to rack railways in Switzerland and Austria between 1992 and 1996. Four of them are now the main traction on the Brienz Rothorn Bahn; the four others were built for the Schafbergbahn in Austria, where they run 90% of the trains.

The same company also rebuilt a German DR Class 52.80 2-10-0 locomotive to new standards with modifications such as roller bearings, light oil firing and boiler insulation.