Early settlers had suggested the area to be used as a business centre, but the idea was shelved due to the valley's marshy environment, which was believed to be causing fatal diseases.

The death rate in the area and Victoria City was high in the early colonial days, and the valley became a burial ground for the dead.

For this, the Wong Nai Chung river was redirected to the Bowrington Canal, known as Ngo Keng Kan (鵝頸澗) locally, concurrent with the reclamation of Wan Chai.

It was caused by the collapse of a temporary grandstand, which knocked over food stalls and set bamboo matting ablaze.

On 19 December 1941, the Japanese Imperial Army entered the hill east of the valley and fought their way to Blue Pool Road.

Civilians and Soldiers captured were kept in the appalling conditions of 'the black hole of Hong Kong' (a house on Blue Pool Road).

Two of the territory's tallest residential buildings, Highcliff and The Summit are specifically in Stubbs Road, facing Mount Nicholson.

Many other sports are participated and competed in by Hong Kong First Division's Happy Valley Athletic Association.

[3] Happy Valley is home to a number of prestigious institutions, international schools, and special education.

Located on Blue Pool Road, the Lycée Français International Victor Segalen, the French international school, maintains its Blue Pool Road campus, housing the administration and secondary school section, in Happy Valley.

[4] Located on Blue Pool Road, the Hong Kong Japanese School's Happy Valley Campus is in the community.

[6] Located on Blue Pool Road, Hong Chi Lions Morninghill School [zh] offers special education for children with mild intellectual disability.

Hong Kong Tramways extended their network into Happy Valley in 1922,[7] and the community has been served by the trams ever since.