Its southern terminus is at I-40 in Dandridge, Tennessee; its northern terminus is on Wellesley Island, New York at the Canadian border, where the Thousand Islands Bridge connects it to Highway 137 and ultimately to Highway 401, the main Ontario freeway connecting Detroit via Toronto to Montreal.

The major metropolitan areas along the route of I-81 include the Tri-Cities of Tennessee; Roanoke in Virginia; Hagerstown in Maryland; Harrisburg and the Wyoming Valley in Pennsylvania; and Binghamton and Syracuse in New York.

[9] I-81 begins in Tennessee at I-40 in Dandridge, a route that connects to Knoxville to the west and Asheville to the east.

The route parallels the Appalachian Mountains for much of its route through Tennessee and Virginia, serving such cities as the twin cities of Bristol, Tennessee and Virginia; Wytheville; Roanoke; Christiansburg; Lexington; Staunton; Harrisonburg; and Winchester.

[11] I-81 briefly enters the Eastern Panhandle of West Virginia for about 26 miles (42 km), serving the city of Martinsburg.

I-81 is the primary north–south Interstate Highway in Washington County, connecting Hagerstown with Chambersburg and Harrisburg to the north and Martinsburg, Winchester, and Roanoke to the south.

[13] I-81 passes through the state of Maryland at one of its narrowest points, the "Hub City" of Hagerstown where it intersects with a large number of other routes, most notably I-70.

The route then travels northeast toward the Wyoming Valley, where it serves the cities of Wilkes-Barre and Scranton, then heads north through the Endless Mountains region toward the state line.

South of Watertown, I-81 closely parallels US 11, the main north–south highway in Central New York prior to the construction of I-81.

At Watertown, US 11 turns northeastward to head across New York's North Country while I-81 continues on a generally northward track to the Canadian border.

[21] After several bouts of expansion, the freeway was completed from US 40 (now Maryland Route 144 [MD 144]) to the Pennsylvania state line in 1958[22] and marked as I-81 in 1959.

[26] In western Maryland, various parts of I-81 were built in the early 1960s, and the remainder of the highway south to the Potomac River was under construction by 1965[27] and opened in 1966.

Construction was expected to be finished in 1969,[28] but a large portion of the work would not be completed until 1974, and most of the road was open by December 1974.

[29] The final major segment of the Interstate in the north to be built was a 17-mile (27 km) section in New York, opened in October 1968.

[38] NY 281 is a north–south state highway in Central New York in the US that extends for 16.56 miles (26.65 km) across Cortland and Onondaga counties, roughly paralleling I-81 and connecting at both ends.