Construction on the graded highway, using a surface of crushed rocks, through the Yakima Canyon began in 1920 and was completed on September 12, 1924. It cost approximately $1 million to construct (equivalent to $ in dollars) and included several tunnels cut through the lava basalt cliffs using dynamite that were later abandoned. The highway was signed as part of State Road 3 and incorporated into the Yellowstone Trail, a national auto trail, and later the federal numbered highway system created in 1926. Under the federal system, the Ellensburg–Yakima section formed part of US 97, the main north–south route through central Washington and Oregon. The highway was paved with concrete in 1932 and renumbered as Primary State Highway 3 (PSH 3) in 1937. The canyon highway's tunnels were bypassed by a new alignment built closer to the river in 1963, after traffic volumes had outgrown the narrow tunnels.