In the southern half of the village, the highway follows a zig-zag routing as it leaves Fayette Street at River Road before returning to the north at Washington Street one block to the east. While on Washington Street, the route passes over the Cayuga–Seneca Canal and enters the village's center, changing names to Virginia Street in the process. Not far to the north, NY 96 heads into Waterloo's central business district, built up around the junction of Virginia and Main (US 20 and NY 5) Streets. Past Routes 5 and 20, NY 96 continues north as a residential street to the village line, where the route turns to the west with a slight trend to the north. At this point, the scenery surrounding NY 96 shifts from house-lined streets to rural countryside once again, an appearance that follows the road to the northwest through the town of Waterloo and across the county line.