NY 54 continues north through Penn Yan on West Main Street, crossing the outlet into the Kenka Mills section. Within Kenka Mills, NY 54 remains a two-lane commercial street, intersecting with the northern terminus of its child route, NY 54A (Elm Street). NY 54 continues north along Main Street until the intersection with Clinton Street, where it turns east, crossing a local railroad before leaving downtown Penn Yan as a two-lane residential street. After crossing northeast through Penn Yan, NY 54 intersects with North Avenue (former CR 20). Just after this junction, NY 54 enters the town of Benton. Within Benton, NY 54 becomes a rural two-lane roadway, intersecting with the southern terminus of CR 15 (Pre-Emption Road) before crossing into the town of Torrey. After entering Torrey, NY 54 intersects with CR 9 (Ridge Road).