MD 263 also connects Prince Frederick with the northeastern Calvert County towns of Chesapeake Beach and North Beach; access to the towns is provided through a connection with MD 261 at Parran.

The state highway heads northeast as a two-lane undivided road that immediately crosses Hunting Creek and passes through a forested area with scattered residential subdivisions.

Within the community, the state highway intersects Emmanuel Church Road, which leads south to the historic home Cornehill.

The state highway intersects Ridge Road, which heads north into the center of the beach community, before it reaches its eastern terminus at a dead end just west of the Chesapeake Bay shoreline.

[7] The directional crossover intersection at the state highway's western terminus with MD 2/MD 4 was installed in 2007.