The Erie Canal is now little more than an upstate tourist attraction, but its importance to the nation cannot be overstated. By connecting the Great Lakes to the Atlantic, it launched the American economy and ushered the United States into the industrial age, shaping cities like Chicago and Cleveland and establishing New York as the continent’s economic center.

This is the epic narrative told in “Wedding of the Waters” (W. W. Norton, 448 pages, $24.95), Peter L. Bernstein’s engaging new history of the canal: the tale of how an engineering project changed America from colonial backwater to world power. The hero of this epic is DeWitt Clinton, 10-term mayor of New York City and two-term governor of New York state, who championed the canal and guided it to completion.

After the revolution, America was in a tenuous situation: The bustling column of Eastern states, sandwiched uncomfortably between the Appalachians and the Atlantic, was cut off from an expanding frontier and surrounded by European imperial powers. Before he became the first president, George Washington noted the fledgling nation’s peril: “The Western settlers … stand, as it were, upon a pivot. The touch of a feather would turn them any way.” The Erie Canal secured the West and set the country upon its expansionary course.

Mr. Bernstein clearly admires Clinton, whom he depicts as a visionary politician, descrying the far-reaching benefits in a scheme derided elsewhere. The merchants of New York were dubious about publicly financing a project that might not bring the promised rewards. Many were baffled by the sheer magnitude of the idea. But the governor’s political opponents eventually recognized the undeniable benefit of “Clinton’s Ditch” – and then took credit for it.

Mr. Bernstein nicely evokes how the Erie altered New York. An entire economy sprouted along the canal’s banks, even while it was still under construction. The workers who dug the canal had to blast their way through terrain out of a Thomas Cole painting. “In the 14,000 square miles of western New York,” Mr. Bernstein writes, “there were fewer than eight people per square mile in 1820, three years after work on the Erie Canal began. Everything else was ‘sombre savage majesty,’ much as it would appear to de Tocqueville in 1831. The single significant break in the forest was at the western end of the middle section – and there only because of the insect-laden muck across swamps and marshes.”

By the mid-19th-century, the canal had transformed the rural burgs of upstate New York into a succession of robust mercantile cities. Isolated towns like Buffalo, Schenectady, and Utica suddenly became players in the Industrial Revolution. In Syracuse, Mr. Bernstein notes, the canal “created a large industrial center out of what had been described by an 1820 visitor as ‘so desolate it would make an owl weep to fly over it.'”

The effects on the rest of the nation were equally astounding. It opened up the fertile West to development and international trade. The United States, Mr. Bernstein informs us, enjoyed one if its greatest periods of economic growth in the years after the canal opened. There were about 100 people in Chicago in 1830; two decades later, there were 30,000 (and a decade after that, 100,000). Grain from the Midwest fed European workers, and European luxury goods suddenly became affordable to the average American. The canal literally allowed commerce to flow.

Mr. Bernstein writes with simplicity and clarity, and he conveys his enthusiasm for his subject with convincing statistics, as well as some wonderful stories. We are treated, for instance, to a vivid account of the “Wedding of the Waters,” the ceremony that marked the completion of the canal. DeWitt Clinton didn’t just pour a keg of Lake Erie water into the Atlantic; water from the Ganges, the Indus, the Nile, the Thames, and 10 other famous rivers was added for good measure. Even more impressive was the cannonade that announced the beginning of festivities:

The news was signaled by artillery lined up all the way from Buffalo to New York, with each gun within audible range of the other guns on either side of it. As each shot was fired, the next gun went off, all the way from Buffalo to Sandy Hook, New Jersey, at the southern end of New York harbor, at which point the guns fired a return sequence back to Buffalo.

In a passage like this, we sense the violent and rapid collapse of distance.

Mr. Bernstein can sometimes be overenthusiastic, distracting us with the tangential and anecdotal: the history of Tammany Hall, James and Dolly Madison’s escape from the White House during the War of 1812, the transformation of England’s economic base from agriculture to industry. The canal disappears for long stretches of the narrative, and the book’s opening chapter has the flavor of a redundant school lesson, drifting all the way back to ancient Babylon, as if we had never heard of canals. (“The premier innovation in transportation was the invention of the wheel,” he informs us at one point.)

Despite this slow beginning, however, “Wedding of the Waters” is an exciting account of one of America’s grandest civic projects. Mr. Bernstein gives us a colorful picture of a great undertaking by a country on the verge of greatness.

Mr. Vaughan is a writer living in Brooklyn.