MD 306 begins at the eastern town limits of Federalsburg adjacent to Lake Chambers, an impoundment of Tanyard Branch.

The roadway continues west as Central Avenue toward an intersection with MD 315 (Liberty Road) east of downtown Federalsburg.

MD 306 heads northeast as a two-lane undivided road, passing through a mix of farmland and forest.

The state highway also follows the eastern edge of Idylwild Wildlife Management Area.

After crossing Houston Branch, MD 306 curves to the east and reaches its eastern terminus at the Delaware state line, where the highway continues into Sussex County as Dublin Hill Road, which heads east to an intersection with Delaware Route 404 (Seashore Highway) northwest of the town of Bridgeville.