It serves to link SR 68 with NC 294, at the Tennessee/North Carolina state line.

SR 123 is a short 1.3-mile (2.1 km) highway entirely in Polk County and Cherokee National Forest.

Two-lane throughout and no shoulders, it servers primarily as a link, with NC 294, to connect travelers from Turtletown and Farner, in Tennessee, to Murphy and the Hiwassee Dam, in North Carolina.

SR 123 was known for many years as the shortest state route in the entire state of Tennessee until 2007, when it was surpassed by SR 448 (North Parkway), at 0.6 miles (0.97 km) in Sevierville.

[citation needed] The entire route is in Polk County.