The southern segment is signed as SR 238 and is a divided multilane surface highway that runs parallel to the Hayward hills between I-680 in Fremont and I-580 in Castro Valley.

In Downtown Hayward immediately north of SR 92, northbound traffic continues along the original SR 238 alignment on Foothill Boulevard, while southbound traffic is diverted onto A Street and Mission Boulevard.

At the north end of Hayward, it changes its name to East 14th Street, which continues as a major thoroughfare going through San Leandro and Oakland.

Mission Boulevard joins the historic centers of the Mission San Jose and Niles districts of Fremont (formerly independent towns), the Decoto district of Union City (formerly an independent town), and Hayward.

Although the 2.23-mile-long (3.59 km) I-238 goes in an east–west direction from Castro Valley to San Leandro, the California Department of Transportation (Caltrans) officially signs it as a north–south freeway since the rest of SR 238 is more north–south.

From there, it enters into the southern portion of the census-designated place of Ashland, running parallel to its border with Cherryland.

[4] Then, after years of various lawsuits and appeals, Caltrans decided to cancel the project in 2003 and sell off the property it had acquired in the name of eminent domain along the proposed route.

Both numbers—I-238 and I-880—were approved by the American Association of State Highway and Transportation Officials (AASHTO) on July 7, 1983.

In September 2006, a project began to reconstruct the entire length of I-238, including a reconfigured interchange with I-880 and an added travel lane in each direction.

Additionally, almost all the bridges and overpasses were replaced with new ones meeting current earthquake resistance standards.