The direction changes again southward as NY 157 passes the campground for Thompson's Lake State Park. Now running lakeside, the route turns southeast along the southern shore of Thompson's Lake, passing many waterside residences. After leaving the lakeside, NY 157 enters the hamlet of Thompson's Lake, a small community based around the junction of NY 157, NY 157A, (Thacher Park Road) and CR 303 (Beaver Dam Road). At the junction, located to the southeast of Thompson's Lake Rural Cemetery, NY 157A terminates at NY 157, which turns north on Thacher Park Road. CR 303 begins westward on the right-of-way seceded by NY 157. Now running north, NY 157 leaves the hamlet, running east of the lake.