Continuing north through the town of Schaghticoke, NY 40 returns to its rural settings north of Melrose, turning northeast at the junction with Northline Drive. Along this northeastern stretch, the route passes through the rural hamlet of Schaghticoke Hill and soon crosses the Tomhonnock Creek into the village of Schaghticoke. At the southern end of the village, NY 40 reaches a junction with NY 67 (Old Schaghticoke Road). NY 40 and NY 67 become concurrent and run along the Hoosic River into the village. Known as Main Street through the village, NY 40 and NY 67 become a two-lane commercial street through the village. Just north of downtown, the routes reach a junction with CR 125, where NY 67 turns eastward while NY 40 proceeds north.