After descending from Snake Hill, NY 137 enters the hamlet of Sarles Corners, where it intersects with Upper Shad Road.

After leaving Sarles Corners, NY 137 bends northward, becoming a two-lane residential street through Pound Ridge, running along the side of Horseshoe Hill, where it intersects with Westchester Avenue.

[3] After the junction, NY 137 continues northward through the town of Pound Ridge, soon entering the hamlet with the same name.

The hamlet consists of several residences, commercial businesses and most importantly, a junction with the eastern terminus of NY 172 (Pound Ridge Road).

Stone Hill Road is a two-lane wooded street, and NY 137 proceeds northwest through the town of Pound Ridge past a pond.

The segment, designated as unsigned State Highway 1306 (SH 1306), 5.72 miles (9.21 km), was given a contract on August 31, 1915.

[4] NY 137 was first designated in the 1930 renumbering of state highways in New York as a continuation of the road leading north from Stamford, Connecticut.