It remains in the Ridge-and-Valley topographic region of the Appalachian Mountains for its entire length in Tennessee, and runs in a northeast to southwest direction.

[4] I-81 begins at a directional T interchange with I-40 near Dandridge in unincorporated Jefferson County about 35 miles (56 km) east of downtown Knoxville.

Traveling in a northeast-to-southwest alignment in a valley through mostly farmland and some woodlands, the Interstate has its first interchange with State Route 341 (SR 341) a short distance later near White Pine.

[5][6][7] About five miles (8.0 km) past the Greene County line is an interchange with US 11E near Mosheim, which provides access to Greeneville to the southeast and Bulls Gap to the northwest.

Continuing through a predominantly rural and agricultural area, I-81 reaches SR 70, which connects to Greeneville to the south and Rogersville to the north.

The route then proceeds through a mix of farmland, woodlands, and residential neighborhoods, briefly shifting eastward and crossing a ridge after a few miles.

[21][22] During the planning phase, it was also suggested that the Interstate follow the corridor of US 11W from Knoxville to Bristol, but residents of Grainger County were opposed to this.

[23] The alignment was reaffirmed in a map produced by the Bureau of Public Roads, the predecessor agency to the Federal Highway Administration, in September 1955.

Referred to at the time as the "Bristol Bypass", this section opened to traffic on November 20, 1961, along with I-381 directly across the state line.

[30][31] The contract to construct the segment between the southern terminus with I-40 and US 25E near Morristown was awarded in June 1964,[32][33] and completed in December 1966, along with the connecting section of I-40.

[36] The decision to prioritize other Interstate Highways was criticized by some due to the unsafe conditions and high accident rate on US 11W, which had earned the nickname "Bloody 11W" and was the site of the deadliest traffic collision in state history in 1972.

[27][37][38] The slow progress on the Interstate became an issue in the 1966 gubernatorial election, when Democratic candidate John Jay Hooker accused primary opponent Buford Ellington, who served as Governor from 1959 to 1963, of neglecting the stretch allocated for Tennessee.

[37] Ellington, who was elected that fall, responded with a promise to complete I-81 by 1971, the year the next governor would leave office, as well as improve US 11W.

[54][55] Once all remaining construction began, completion of I-81 in Tennessee was expected by late 1973,[56] but was delayed by the energy crisis that year.

[57] On December 20, 1974, the entire final stretch between US 11E and SR 126 was dedicated by then-Governor Winfield Dunn, and partially opened, with some portions restricted to two lanes.

[63] A group of six youths from Pikeville, Kentucky, forced the four members of the Lillelid family into their van and to drive approximately 3.5 miles (5.6 km) on the Interstate to the SR 172 interchange, which was the next exit.

[68][69] A 2008 study conducted by TDOT on the I-40 and I-81 corridors identified a number of steep grades on both Interstates difficult for trucks to ascend, causing congestion and safety hazards.

[77] Exit numbers were based on US 23 mileage, which at the time was in the process of being upgraded to a freeway to the North Carolina state line.