At the Banner Creek Summit, SH-21 enters Custer County and the Challis National Forest, and descends northward with Banner Creek and Cape Horn Creek, tributaries of the Middle Fork of the Salmon River. At Cape Horn the highway turns southeast to gradually climb with Marsh Creek to the border of the Sawtooth National Recreation Area, where SH-21 enters the drainage of the main Salmon River, and gently descends to Stanley. About west of Stanley is the turnoff for the spur road to the photogenic Stanley Lake at , framed by the jagged McGown Peak at .