PA 194 enters Penn Township in York County and becomes Frederick Street as it becomes lined with homes, continuing into the borough of Hanover. Upon reaching the Forney Avenue intersection, the route splits into a one-way pair with northbound PA 194 continuing along two-way Frederick Street and southbound PA 194 using Forney Avenue to one-way Chestnut Street. Both streets pass a mix of homes and businesses, continuing into the downtown area of Hanover. In this area, the route meets PA 116 and forms a concurrency with that route. In the commercial center, the one-way pair crosses PA 94, with northbound PA 116/PA 194 becoming Broadway at this point. A short distance later, PA 116 splits from PA 194 by turning east onto York Street, with northbound PA 194 continuing north as a one-way street. The one-way pair passes rowhomes, eventually merging with the route continuing north on two-way Broadway. The road crosses CSX's Hanover Subdivision and a York Railway line as it continues past a mix of residential and commercial buildings before becoming lined with homes. After intersecting Moulstown Road, PA 194 crosses back into Penn Township and becomes Abbottstown Pike as it enters agricultural areas with scattered development.