FM 1954 was first designated on February 24, 1952. Its western terminus has always been at FM 368 at Holliday, and its original east end was at SH 79. The route was lengthened to US 281 on May 2, 1962. The extension into Claycounty and to Lake Arrowhead State Park occurred on January 16, 1968, and the roadway ended within the park. This stub end became part of PR 63 on January 31, 1973. On September 5, 1973, FM 1954 was extended northward to its current terminus at its second intersection with FM 2393.