Soft gravel covered the Pali Road from Lahaina to central Maui at the beginning of the century, creating a less than satisfactory surface for the heavy teaming which occurred along the route to Lahaina. Travelers faced another challenge in addition to the ruts and potholes of the road's surface; they were advised to sit on the windward side of whatever they were traveling in, to keep it from being blown over.
The advent of the automobile created demand for improvements. In the early 1920s crushed rock from Ukumehame Stream applied with steam rollers improved the surface along the Olowalu section. Other sections of the road were straightened and widened and the grades improved. By 1925 a car could go to and from Lahaina relatively easily and comfortably.
In 1910 a group of local citizens attempted to reopen the `Iao-Wailuku Pass which had been unused for many years. Two men reached the summit from the Wailuku side but found further exploration impossible. They planted a flag as a guidepost. Two others attempted the same from the Olowalu side but could not reach the flag after two days. Another attempt in 1917 proved successful. Wailuku residents Earl Corson and Dr. Albert Hoeffer traversed from `Iao to Lahaina over the obliterated trail in two days.
Martha Foss Fleming, in the process of studying old trails on Maui, suggested to the Maui chapter of the Daughters of the American Revolution that an ancient trail be made passable once again and suggested the `Iao-Olowalu Pass. The D.A.R. appropriated $50 for the project in May 1933. Humehume, a noted Olowalu mountain climber and goat hunter along with two residents of `Iao Valley said to be descendants of ancient bird catchers, completed the work within weeks. The first hiking party to traverse the reopened pass accomplished the feat in 16 hours, having viewed magnificent scenery, rare endemic plants and unusual geologic formations. The trek was still a hazardous one, possible only for experienced hikers.
Federal aid enabled the Territory of Hawai`i's Highway Department to pave a two and half mile stretch of road at Olowalu in 1938. The work slightly realigned the lanes toward the ocean and made the road almost entirely straight. The one-lane bridge just outside the village, a well-known Olowalu feature, was widened to accommodate two cars at the same time.
In 1950 Territorial Contractors began construction of the Olowalu Pali section of what was then termed the Sunset-Skyline highway, replacing the old Pali road. This segment stretched from McGregor Point to Olowalu.
Part of this effort included "Operation Puka-in-the Pali," the construction of Hawai`i's first highway tunnel. Signifying the importance of this accomplishment, the launching of construction was marked by a blessing and lu`au
for 600. Blasting began in September 1950 from the Wailuku end and progressed at six feet a day. Workers emerged on the other side in February 1951. The 315-feet long tunnel and 5.2-mile highway officially opened in October 1951 to territory-wide fanfare.
The widening and surfacing of the 2.6-mile section of the Pali Road going from Olowalu to Lahaina began in 1951. Highway officials did not consider the work done in 1938 on this stretch of highway, described then as "light paving," to be adequate.