The highway begins at a junction with U.S. Highway 259 (US 259) in Rocky Branch and heads north to a junction with State Highway 77 (SH 77) in Naples.

SH 338 was designated on November 22, 1940, to serve as a route between Rocky Branch and Naples.

[1] SH 338 begins at a junction with US 259 in Rocky Branch.

[2] It heads north from this junction to an intersection with FM 161.

[1][3] The entire route is in Morris County.