Interstate 540 begins at I-40 exit 283, technically in Durham County by a few hundred feet, as an eastward extension of N.C. 540. It runs for 26 miles, ending at I-495/U.S. 64/264 near Knightdale.
I-540 has only been around since 1997, but its history predates that opening by almost thirty years. Planning for what became I-540 began in the early 1970s. The dedication of Research Triangle Park in 1959, followed by the opening of IBM in the park in 1962, led to multiple new subdivisions in North Raleigh, including North Ridge, Quail Hollow and Brentwood. At this point, the only freeway in Raleigh was the Beltline, and the only way into RTP was two-lane NC 54, as I-40 was still being designed and built, and wouldn't be completed until 1969.
Soon after I-40 was first completed, the need for an east-west freeway through North Raleigh became apparent. All traffic headed to RTP was forced to take north-south roads to the Beltline, then take I-40 west into RTP. The presence of Umstead State Park and the RDU Airport prevented a direct connection from north Raleigh to I-40 near RTP, so any connection would need to go to one side or the other of the obstructions. A southern route to the southeast of Umstead Park would be much more contentious because of the addition of so many new neighborhoods in north Raleigh, although it eventually was added to the map as the now-cancelled Duraleigh Connector. The northern route, which eventually became I-540, would be routed through land that was years away from development.
The Northern Wake Expressway, the original working name for the freeway, was first put on planning maps in 1976, and routed along the edge of the Falls Lake watershed. By 1985, neighborhoods had appeared in far north Raleigh in anticipation of the new freeway; the advance placement of the road's route on maps allowed developers to plan their neighborhoods around the route of the freeway. As a result, very few buildings were condemned to build the road, and construction crews simply had to clear the trees out of the right-of-way that had grown in the meantime.
By the mid 1980s, growth in western Wake County led NCDOT to expand the planned route of the Expressway to be a full loop around Raleigh, roughly at a 12-mile radius to downtown. However, the preliminary work that had been done in north Raleigh was not impacted by the expansion, as the remainder of the road was simply mapped out as the first segment had been with no additional money spent on right-of-way or construction.
While the Beltline was designated I-440 in 1991, the Northern Wake Expressway did not have a designation assigned to it until 1996, when the first section of the road was nearly complete. The state DOT announced that the Expressway would be named I-540, but only temporarily. When the freeway was completed and connected to I-40 on both ends, the plan was to rename the highway I-640, which would follow long-established conventions for numbering of three-digit Interstates: an odd first number denoted a spur, while an even denoted a loop or a bypass.
The first section of the freeway, connecting I-40 to Glenwood Avenue just north of the airport, opened on January 21, 1997 and immediately changed commuting patterns all over north Raleigh. Instead of being forced onto the Beltline and I-40 to get to RTP, commuters now headed west to Glenwood Avenue, then onto I-540 which emptied onto I-40 at the eastern edge of RTP.
Since Glenwood was the only access to the freeway from the east for nearly three years, it became severely choked with traffic to the point that RTP commuters who lived closer to the Beltline were better off taking their old route to work. The congestion at I-540's eastern end, which moved further east every few years, was always terrible no matter what cross street the freeway ended at; it wasn't until the freeway was extended to Capital Boulevard in 2002 that delays were uncommon at the eastern end of 540.
I-540 was extended east in shifts, as seen below:
- Glenwood Avenue (exit 4) to Leesville Road (exit 7): opened December 11, 1999
- Leesville Road to Creedmoor Road/NC 50 (exit 9): opened December 21, 2000
- Creedmoor Road to Falls of Neuse Road (exit 14): opened June 29, 2001
- Falls of Neuse Road to Capital Boulevard/US 1 (exit 16): opened August 12, 2002
- Capital Boulevard to the US 64 Bypass (exit 26): opened January 16, 2007
In a reversal of its original plan, NCDOT announced in 2002 that the road will remain Interstate 540 even after it hooks back up to I-40. This would make I-540 the first interstate in the country to connect to the same interstate at both ends, though many other three-digit interstates with an odd first number connect.
Upon requesting designation of U.S. 64 east of I-440 as I-495 in 2013, NCDOT officially codified their plans to maintain the I-540 number as part of the designation request. Despite the fact that I-540 now ends at interstates at both ends (I-40 and I-495), it kept its number and will not be renumbered. Since the section south of I-495 is planned to be built as a toll road and will likely be numbered N.C. 540, I-540 is now at its final length and will not be extended as an interstate beyond its current distance.
Until I-540 was complete to Capital Boulevard, everything east of Glenwood Avenue was signed as Future I-540, owing to a rule that all Interstates must end at a road that's a part of the National Highway System. None of the roads in between Glenwood and Capital were on the NHS, so the Future signs remained in place for nearly three years.
Unlike the Beltline, I-540 is referred to by its number quite often, even among longtime residents of Wake County. The "Outer Loop" is the main alternate name, and the two are often used interchangeably (or together, as the "540 Outer Loop").