The Valley was a tear in time created during the Last Great Time War which led to the time before the Time War.
When the Valley opened, the natives of the world it had appeared on were rendered non-corporal and became the Foregone. The War Doctor came to investigate the Valley however he was ambushed by the Third Power, who infected him with temporal toxaemia and took his TARDIS for themselves. They wedged the ship inside the Valley to stabilise a route through it, which they used to send refugees to safety away from the Time War.
For three years the Third Power continued to use the Valley secretly for their refugees, unnoticed by the Time Lord forces assigned to guard the Valley, known as the Valley Guard. During this time the wreck of the Proteus appeared in the Valley, carrying a resurrected form of Morbius. (AUDIO: Morbius the Mighty [+]Loading...["Morbius the Mighty (audio story)"])