After Canyon City ruins, the trail diverges away from the river for the first time as the river disappears into a small canyon (Canyon City's namesake) and climbs up valley wall, traversing sub-alpine forest. For many sections of the trail, old telegraph and tram wires are exposed adjacent to the trail. For the gold rush prospectors, this section of the trail was one of the most difficult. In winter, when the Taiya River was frozen, the gold rush stampeders could easily travel up the ice highway; however, in the summer this segment was described as "the worst piece of trail on the road, fairly muddy with many boulders and with some short, steep ascents and descents in and out of small gulches."