The village is situated in the eponymous valley between the Greater Caucasus and Bzyb ranges.

The valley was inhabited by the Abazins tribe which was one of the last peoples of the Caucasus to be conquered by Russia.

After their subjection in 1864 almost all of them escaped to Turkey; many perished at the Black Sea coast from hunger and malaria, during the transportation to Ottoman Empire.

[2] Pskhu was the only settlement in the Transcaucasia to be occupied by Wehrmacht during the Battle of the Caucasus of World War II in the autumn of 1942.

The nearby Inal-kuba (Pskhu-Nykha) mountain (1290 m) is one of the seven shrines of the Abkhaz people.