A state-maintained continuation of West Washington Street, NY 54 bends to the southeast and under the expressway, crossing over the former Erie Railroad Rochester Division before entering downtown Bath.

[3] Now outside of the village of Bath, NY 54 drops the Geneva Street moniker, becoming a two-lane rural roadway and intersecting with CR 113 (Mount Washington–Argus Hill Road).

Through Urbana, NY 54 continues as a mix of rural and residential roadway, intersecting with CR 89 (Hammondsport–Pleasant Valley Road) at-grade.

This pattern continues to the northeast for several miles, leaving Urbana for the town of Wayne, where the two roads both become residential, and enter the hamlet of Grove Springs.

A second East Lake Road serves as the local residential highway for a short distance, until the hamlet of Crosby.

Entering the hamlet of Willow Grove, this merges into NY 54 once again, which soon intersects with the western terminus of CR 30 (Second Milo Road).

A short distance after the curve, NY 54 intersects with CR 17 (Bath Road), which connects to a local airport.

[3] NY 54 continues north through Penn Yan on West Main Street, crossing the outlet into the Kenka Mills section.

Within Benton, NY 54 becomes a rural two-lane roadway, intersecting with the southern terminus of CR 15 (Pre-Emption Road) before crossing into the town of Torrey.

Past Hammondsport, NY 38 continued to Penn Yan by way of the western and northern shores of Keuka Lake.

[8] In the late 1930s, work began on a new alignment for NY 54 between Bath and the southern tip of Keuka Lake that bypassed Hammondsport to the south.

The portion of the highway that bypassed Fish Hatchery Road was completed c. 1939[9][10] while the remainder was opened to traffic in the early 1940s.

[11][12] NY 54 was extended a short distance westward on July 1, 1974 to meet the new Southern Tier Expressway at exit 38.