It serves as the setting for the game's sixth chapter, "We Don't Go to Ravenholm", which follows protagonist Gordon Freeman as he journeys through the area after escaping a Combine attack in order to reach a nearby Resistance outpost.

[1][2] Shortly before the level, companion Alyx Vance states to protagonist Gordon Freeman, whom the player controls, that "we don't go [to Ravenholm] anymore", foreshadowing its overrun nature.

[2] The level was initially called "Traptown" or "phystown" in the game's files during an early E3 demo of Half-Life 2, referencing the numerous booby traps scattered through it.

Datamined information by fans showed that an early build featured Combine forces in the level in addition to headcrabs and zombies, and the "mining town" aspect of Ravenholm was much more prominent, including allowing the player to control a large excavator.

Players who possessed shared knowledge of zombie-based fiction such as The Zombie Survival Guide could also instinctively guess that the objects able to be picked up by the gravity gun could be used in an offensive manner.

[1] Level designer Dario Casali stated that Ravenholm was conceived as a "sanctuary gone bad", where the player went expecting help from potential allies, but realized they had all turned into enemies.

Casali further stated that the town was designed to both appear isolated to the point where it could have believably escaped Combine notice for a time while simultaneously match the game's other levels, describing this as a challenge.

[4] The concept was later given to Arkane Studios, who changed it into a spinoff Half-Life game titled Ravenholm set entirely in the town, but was cancelled by Valve after "9 or 10" levels had already been completed.

Grigori, who was revealed to have survived his last stand in Half-Life 2, would have gradually mutated into an inhuman being as the result of a serum created from headcrab blood that he believed would protect him from harm.

Describing the town's atmosphere as "oppressive", he noted that the level's incidental details, such as bodies and gore, told a "powerful story", saying that it was "hard not to feel sorry" for the unwillingly transformed zombies.

[14] USgamer journalist Jeremy Parish stated that Ravenholm "makes great use of audio cues to build tension", noting how the player can hear poison headcrabs before they see them.