The route was established early in the history of the Texas highway system originally beginning in Alpine and ending at the New Mexico state line near Carlsbad, NM.

The route's length and termini have changed over the years as have the roads with which it intersect largely due to two factors.

Later was the construction of I-10 at Van Horn that caused SH 54 to be extended to meet the Interstate and resulted ultimately in the realignment and eventual decommissioning of US 80 in western Texas and changes in the designation of the former route of US 80 through the town.

This route was originally proposed in 1917 as part of a potential SH 10 beginning at the New Mexico state line, then proceeding south to Van Horn then southeast to Alpine before changing course to the northeast terminating in Fort Worth by way of Fort Stockton, Sonora, and Brady.

[2] In 1919, another proposal incorporated a route called SH 12 from New Mexico through Van Horn and then south to the Rio Grande.

[6] Over the next several years, many changes to the route were spurred by the creation of the United States Highway system.

From I-10 the route runs concurrently with US 90 north along Van Horn Dr. At Broadway Blvd., US 90 terminates and SH 54 turns east along Bus.

The route follows the western edge of the basin east of the Sierra Diablo and the Texas Parks and Recreation Department's Sierra Diablo Wildlife Management Area until the route reaches its northern terminus at US 62 and US 180 between Salt Flat and Pine Springs near Guadalupe Mountains National Park.