Pleasant Valley is one of the oldest towns in Iowa. It was first settled in the early 1830's and the first business was an old grist mill that sat near where the Valley Inn stands today. Soon thereafter, a sawmill was built nearby. These two businesses helped with the development of early settlements in the immediate area.

In the late 1830's or early 1840's a hotel/tavern was built on the spot where Valley Inn sits today. The original rubble foundation still exists and is visible on the exterior of the restaurant. Eventually, the second floor was turned into an elaborate ballroom before the place was turned into what was believed to be a gambling hall in the late 1800's. The upstairs ballroom was eventually replaced by two apartments which remained in place before a complete remodel.

When Prohibition took hold in 1919, it was rumored that the Valley Inn became a speakeasy and hangout for organized crime members. Al Capone was said to have frequented the Valley Inn before he was convicted on income tax evasion in 1931.

The Valley Inn has undergone a number of owners over the years. After serving in the army in World War II, Ambrose Carlin came home and bought the Valley Inn in 1948. He ran the place for 30 years before he retired and his daughter Frances Devlin took over. She ran it until 2007 when the Blaum family bought the place and completely renovated and remodeled it in 2012, including a new kitchen and bar area. This gave the Valley Inn a much-needed face-lift. Curtis Blaum is the current owner of the Valley Inn, which now goes by the name of Valley Inn Ale House.