After its western terminus at US-191, SR-262 generally heads east until Indian Route 5099, where it turns south-southwest.

Afterwards, the route turns east and then south for one last time before reaching the eastern terminus at SR-162 in Montezuma Creek.

The State Road Commission created SR-262 in 1958, running from SR-47 (now US-191) north of Bluff east and south for 20.0 miles (32.2 km) to a point in the Aneth Oil Field about a mile (1.5 km) beyond the bridge over Montezuma Creek, near the curve to the south-southwest.

[2] A road from Montezuma Creek west to US-191 at Bluff was added to the state highway system in 1986 as SR-163.

[3] At the time, Utah was considering making the road part of an extension of US-163 into Colorado,[4] but plans fell through, leaving an overlap with US-191 and Route 163 near Bluff that became US-163 to the west and SR-163 to the east.