It travels between Yellowstone National Park near Newcastle, Wyoming and Interstate 90 (I-90) in Rapid City.

The highway enters South Dakota east of Newcastle, Wyoming.

It then becomes a four-lane divided highway, with the two roadways separated by up to 0.5 miles (0.80 km) in some places, including the old gold-mining town of Rockerville, South Dakota, which is contained entirely in the median of US 16.

In Rapid City, US 16 follows Mount Rushmore Road to a concurrency with South Dakota Highway 44 (SD 44; Omaha Street) to the southern terminus of I-190.

From there, US 16 traveled due east, on the present-day routing of South Dakota Highway 248 (SD 248).

It then followed present-day Aspen Boulevard (formerly South Dakota Highway 264, or SD 264) from Brandon east to the Minnesota state line north of Valley Springs.

It travels through Lyman, Jones, and Jackson counties starting near the entrance to Badlands National Park at an intersection with SD 240 (just south of exit 131 on I-90) and terminating at exit 248 of I-90 east of Reliance.