U.S. Route 23 in Tennessee

A proposal to construct a road between Johnson City and Asheville, North Carolina, existed as early as 1919.[4] US 23 was established by the American Association of State Highway Officials (AASHO) on May 26, 1930, with a complete concurrency with SR 36, from the North Carolina state line to the Virginia state line; going through Erwin, Unicoi, Johnson City, and Kingsport.[3][5] Signs were posted later that year.[6] The final section in Tennessee to be paved, located between Kingsport and the Virginia state line, opened to traffic on July 8, 1931.[7] The highway was dedicated by Governor Henry Horton in a large ceremony near the Sullivan–Washington county line on July 17, 1931.[8]

In 1952, US 23 was rerouted southwest of Ernestville, along SR 81 through Flag Pond and Sam's Gap into North Carolina; its old alignment remained part of US 19W/SR 36.

US 23/Corridor B near Erwin in 1990

The widening of US 23 to a four-lane highway between Asheville, North Carolina, and Johnson City, Tennessee, was authorized by the Appalachian Regional Development Act of 1965, which created the ADHS. This stretch was designated as part of Corridor B, and the project was known as Project A-10.[9] The first contract for construction was awarded on February 23, 1968, for the 3.1 miles (5.0 km) stretch between I-81 and near the Gray community.[10] On January 9, 1971, the segment of this highway located between SR 75 in Gray and SR 354 near Johnson City was opened.[11][12] The segment between SR 354 and SR 381 opened on November 17, 1972.[13] On July 1, 1975, the stretch between US 11W/US 19 and SR 19 (Market Street) in Johnson City opened.[14] The section between SR 19 and south of US 321/SR 67 south of Johnson City was opened to northbound traffic on October 23, 1978, and to southbound traffic the following day, after nearly 16 months of delays.[15][16] On November 13, 1981, the stretch between SR 93 and US 11W in Kingsport was dedicated and opened.[17] The segment around Erwin between south of the Nolichucky River and north of Main Street, known at the time as the Erwin Bypass, opened on January 29, 1982.[18][19] That same month, contracts were awarded for the stretch between south of US 321/SR 67 and Main Street in Erwin,[19] and the stretch was dedicated and opened on June 20, 1986, after multiple delays.[20][21]

While Tennessee continued to appropriate funds to construct the highway between Erwin and the Virginia state line, funds for ADHS corridors began lagging in the 1970s, and, by the end of that decade, plans to upgrade the stretch over the Bald Mountains had largely stalled.[9] State Representative Zane Whitson of Erwin, who was elected in 1978, campaigned on reviving the project,[22] but it remained largely dormant until August 1985, when two planners from Johnson City suggested renumbering the route to I-181 in order to make the highway eligible for additional federal funds.[9] In 1986, the extension through the Bald Mountains was included as one of six new freeway projects dubbed "Bicentennial Parkways" in the Better Roads Program, passed by the Tennessee General Assembly.[23] This program, which had been proposed and spearheaded by then-Governor Lamar Alexander, increased the state's gasoline and diesel taxes to fund these freeway projects as well as a backlog of 15 projects that had been labeled as top priorities and other projects.[24] The project was referred to in the plan as the "Interstate 181 Extension" and was expected to cost $95.5 million (equivalent to $203 million in 2021[25]) at the time.[23] The project was further accelerated the following year by then-new Governor Ned McWherter.[22]

The contract for the first section of the extension, 4.6 miles (7.4 km) between south of the Nolichucky River and near the Temple Hill Community, was awarded on February 16, 1990. On May 1, 1990, a groundbreaking ceremony was held, officiated by Governor McWherter.[26] The section between Temple Hill and Flag Pond was awarded on January 2, 1991, and the 2.8-mile (4.5 km) section between Flag Pond and Carver Road, near the southernmost runaway truck ramp, was awarded on May 21, 1991.[4] Due to the mountainous setting, the project proved to be one of the most difficult and laborious projects ever undertaken by the Tennessee Department of Transportation (TDOT) and required nearly 25 million cubic yards (19×10^⁶ m³) of rock and dirt to be moved.[27] In September 1992, a lawsuit was jointly filed against TDOT by the Tennessee Environmental Council, the Tennessee Chapter of the Sierra Club, the Tennessee Scenic Rivers Association, and the Good Earth Defense Fund alleging violations of the National Environmental Policy Act and the Clean Water Act.[28][29] The suit was dropped when TDOT agreed to modify the design of the highway in order to be more environmentally conscious, which included additional erosion control measures and the construction of two wildlife underpass tunnels, nicknamed "bear boxes", under the highway.[30] They also agreed to set up an environmental advisory agency for the department.[31] On December 24, 1993, the section between the Nolichucky River and US 19W opened.[32] On July 5, 1995, the final section opened to traffic in a dedication ceremony at Sam's Gap officiated by then-Governor Don Sundquist, former Governor McWherter, and Congressman Quillen, along with other state officials.[33][34] The final cost of the extension was $170 million (equivalent to $280 million in 2021[25]).[35]

Signage for former I-181 in Johnson City

The controlled-access highway that ran between Johnson City and Kingsport was initially established as State Route 137 (SR 137), with this designation extended as new sections were completed. On June 28, 1982, AASHTO approved rerouting US 23 onto the freeway from its original alignment with SR 36, forming a concurrency with SR 137.[41] On December 4, 1985, the stretch between I-81 and US 11W in Kingsport was renumbered Interstate 181 (I-181). The I-181 designation was extended south to US 321/SR 67 in Johnson City on June 9, 1986.[42] Both of these redesignations replaced SR 137 but kept the US 23 designation, and exits were numbered according to US 23's mileage. This reduced SR 137 to its present-day designation between US 11W and the Virginia state line, all within Kingsport.[37]

On June 7, 1988, AASHTO approved an extension of I-26 from North Carolina to I-81, on contingent upon the completion and certification of the freeway.[43] On August 5, 2003, after completion of a nine-mile (14 km) adjacent section of controlled-access highway in North Carolina, I-26 was extended west into Tennessee, replacing I-181 from Johnson City to I-81.[40] AASHTO initially ruled against an extension of the I-26 designation along the remainder of I-181 to Kingsport, however, since federal guidelines usually require mainline Interstate Highways to end at a junction with another Interstate Highway, an international border, or a seacoast.[44] TDOT had proposed to renumber that stretch as I-126, but rescinded that proposal later that year.[45] The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), signed into law on August 10, 2005, authorized the remainder of I-181 to be redesignated as part of I-26.[46] This took place in March 2007, when I-181 was officially decommissioned, and replaced with I-26 signage.[47][48][49]