The southern terminus of the signed segment is at Pearl Street in downtown Burlington.

The unsigned segment is little more than the southern leg of a wye connection between US 2 / US 7 and VT 2A.

VT 127 was assigned in the early 1940s as a loop route off US 2 and US 7 through Burlington and southern Colchester, where it ended at the junction of Bay Road and US 2 / US 7.

VT 127 northbound follows Manhattan Drive for one block west to Park Street, where both directions of VT 127 come together and turn onto a two-lane limited-access highway named the Winooski Valley Parkway and locally known as the Burlington Beltline.

[7][8][9] A new limited-access highway, named the Burlington Beltline, was built ca.

1971 between Manhattan Drive and North Avenue near the Ethan Allen Homestead.

[6] An extension of the Beltline northwest to the Winooski River opened to traffic as part of VT 127 in the mid-1980s.