An 8.40 mile long segment of Interstate 181 remained posted from I-81 north to Kingsport, Tennessee until 2007.
Interstate 181 overlaid U.S. 23 along a freeway stretching northwest through the Tri-cities area in northeastern Tennessee. I-181 commenced north along U.S. 23 at the exchange with U.S. 321/SR 67 near Roan Hill in Johnson City. Passing between Downtown and the Tannery Knobs, the freeway advanced northward through the city. Crossing Indian Ridge, I-181/U.S. 23 continued northwest to the unincorporated community of Gray and Interstate 81 in Sullivan County.
The northern section of I-181 took a more rural course between Birdwell and Buckaloo Ridges to Rock Springs Valley. Running between Easley Ridge and Pine Hill, I-181/U.S. 23 entered south Kingsport. Continuing along the west side of the city, I-181 traversed eastern reaches of Bays and Holston River Mountains into a broad valley fed by the Holston River South Flork. The interstate portion of U.S. 23 concluded at the exchange with U.S. 11W at Fort Robinson in north Kingsport.
The freeway along U.S. 23 and eventually Interstate 181 was constructed in stages during the 1970s and 1980s as part of the project to construct Appalachian Development Corridor B. The route between SR 67 in Johnson City and I-81 was added to the Interstate system under U.S.C. 139(a) on December 4, 1985. I-181 was formally approved by the American Association of State Highway and Transportation Officials (AASHTO) along a 23.8 mile long segment of U.S. 23 on June 10, 1986:
This section of APD Corridor B is functionally classified as a principal arterial highway and has recently been constructed as a fully access controlled freeway equivalent to Interstate standards.
The route is a logical addition to the System permitting direct Interstate routing from Johnson City and Kingsport, which are urbanized areas of over 50,000 population, to I-81.
Furthermore the Interstate 181 designation did not result in Federal financial responsibility based upon current legislation at the time. Only those routes designated under 23 U.S.C. 139(a) prior to March 9, 1984 were eligible for Interstate 4R funding.
U.S. 23 south from I-181 at U.S. 321/SR 67 in Johnson City to the North Carolina state line at Sams Gap was designated a future part of the Interstate System pursuant to the provisions of 23 U.SC. 139(b) on January 17, 1995. The Tennessee Department of Transportation (TDOT) initially requested on March 10, 2003 the renumbering Interstate 181 south from I-81 to Johnson City as part of a northern extension of Interstate 26 from Asheville, North Carolina. This request was amended to eliminate all of I-181 in the Tri-Cities in favor of I-26. The application cited eliminating confusing exit numbers and potential problems with a local State Route being designated as I-26. The AASHTO Special Committee on Route Numbering however disapproved the application redesignating I-181 to Kingsport as part of I-26 on May 31, 2003 because it did not have concurrence from the Federal Highway Administration (FHWA).
A separate proposal also outlined renumbering I-181 north from I-26/81 as new Interstate 126. It was rejected in June 2003. Interstate 26 became official on August 5, 2003, and the section of Interstate 181 south of I-81 eliminated. This reduced I-181 from 23.85 miles in length to 8.40 miles between I-81 and U.S. 11W (W Stone Drive).
With proponents citing the potential to boost area economic development, subsequent lobbying and legislative actions continued advocating for renumbering the remainder of I-181 as part of Interstate 26. These efforts came to fruition on August 2, 2005 with an announcement by U.S. Senators Bill Frist (R-TN) and Lamar Alexander (R-TN), and Representative Bill Jenkins (R-TN) of the passing of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) highway bill.1
Signs for Interstate 181 were completely removed in March 2007, with the remnant mileage incorporated into Interstate 26.2 Exit numbers were renumbered so that the sequence increased southward from the Virginia state line instead of the previous scheme using the mileage of U.S. 23 north from the Tar Heel State.