PORTLAND, Maine — The Libbytown neighborhood, a historic area of the city that was decimated by changes in the transportation system a half century ago, is thriving once again.

This time, transportation is helping.

The neighborhood, which surrounds Congress Street between Sewall and Valley streets, was the home of mostly Irish immigrants in the mid-1800s. It was named after the Libby family, which established three businesses in the area.

But Libbytown began to decline after the end of passenger train service and the razing of Union Station on St. John Street in 1961.

Then came Interstate 295. In the 1970s, the new highway physically divided the neighborhood — much as urban highways devastated old neighborhoods in Boston and other cities.

However, with the construction of the nearby Portland Transportation Center in 1996 and the restoration of passenger train service, Libbytown began to experience a rebirth. New businesses and residents came to the area.

Now the city is looking at ways to reunify and continue revitalizing the neighborhood with changes to the transportation infrastructure.

As part of the $105 million mixed use development at Thompson’s Point — where ground could be broken as soon as next month — a $3 million federal grant is funding design and construction of infrastructure improvements made necessary by the project.

At the same time, the city, with funding from the Portland Area Comprehensive Transportation System, is conducting a study to find ways of improving traffic flow in the neighborhood.

The changes could include the elimination of several of the highway ramps in the neighborhood, converting portions of Park Avenue or Congress Street from one-way to two-way streets, and adding speed tables, islands and other traffic-calming features to side streets. Improved signals, striping, lighting and landscaping also would make the area safer and easier to use for cyclists and pedestrians.

The city has been hosting public meetings, including one on May 8, to discuss the changes and receive feedback. A similar forum will be scheduled in June, according to a City Hall press release.

“I’m excited about what this might mean for the neighborhood,” said David McGinn, who was born in Libbytown and lived there for 40 years before moving to Deering Center in 2007. He said he attended one of the recent meetings.

“This was a real community, but it was broken apart by the interstate and other things happening when I was young,” McGinn said. “Now there’s a chance to stitch back together a special part of Portland in a way that may be good for the entire city.”