SR 821 was established in 1973 on the old alignment of US 97, which usurped previous state roads that were part of the Inland Empire Highway. The Yakima Canyon road was constructed in 1924 by the state government to replace a gravel road over the mountains to the west and became popular with tourists. The highway was designated as the Yakima River Canyon Scenic Byway by the state government in 1967 and bypassed five years later by a section of I-82 running uphill to the east.