Route 54 continues east into Selbyville as Cemetery Road and crosses the Snow Hill Line of the Maryland and Delaware Railroad at-grade. The highway turns south into Main Street to pass through the central business district. After intersecting the southern terminus of DE 17 (Bethany Road), Route 54 turns east onto Lighthouse Road. In the hamlet of Bunting, the highway intersects DE 54 Alt. (Bunting Road), an alternate route from Selbyville to the town of Bethany Beach. Route 54 passes through Williamsville and begins to pass beach-related suburban development as the highway crosses Drum Creek and Roy Creek before intersecting the east end of DE 20 (Zion Church Road). Past this intersection, the route gains a center left-turn lane and continues past more development. As the highway approaches the town of Fenwick Island, it becomes two lanes again and crosses two tidal ponds on an elevated causeway before it crosses The Ditch between Assawoman Bay to the south and Little Assawoman Bay to the north. After passing to the north of the Fenwick Island Light, Route 54 reaches its eastern terminus at DE 1 (Coastal Highway) in Fenwick Island, one block west of the Atlantic Ocean and one block north of the town of Ocean City on the other side of the state line.