By 1920, what is now Route 54 in Delaware existed as an unpaved county road. The portion of the current route along Millsboro Highway was proposed as a state highway by 1925. This segment of state highway was completed by 1931, along with the portions from south of Columbia to a point along the state line to the east of Delmar and between Selbyville and Williamsville. A portion of the route along the state line east of Delmar was paved as a county road. On July 1, 1935, the county-maintained portions of the road in Delaware were taken over by the state. By 1936, the roadway was paved between Williamsville and Fenwick Island. A portion of road to the west of Selbyville was paved by 1939. By 1942, the remainder of the road in Delaware between the Maryland border and south of Columbia and Gumboro and Selbyville were paved.