Continuing along the Niagara River, NY 266 bends northeast through Tonawanda, passing south of Isle View Park and crosses over Twomile Creek. Passing Veterans Memorial Park, the route enters the city of Tonawanda, gaining the Niagara Street moniker. Becoming a two-lane park and residential street, NY 266 passes Nia-Wanda Park and soon enters the downtown section of the city at Bouck Street. Passing north of Clinton Park, the route passes south of a large commercial development along the Niagara River, reaching a junction with NY 265 (Seymour Street) near the bridge into Niagara County and the city of North Tonawanda.