It extends from Urbana in the north, to southeast of Springfield.

SR 54 was commissioned in 1923 between its current southern terminus and Indiana state line northwest of Willshire.

The highway was routed on to mostly the current alignments of SR 29 and U.S. Route 33 (US 33), and SR 54's current alignment.

[2][3] In 1938 the northern terminus was moved to the Indiana state line west of Celina.

[7] By 2013, it was truncated to its current northern terminus just east of the downtown area.