Happy Valley Racecourse, one of the two race tracks of the Hong Kong Jockey Club is located in Happy Valley.

The Hong Kong Racing Museum, Hong Kong Sanatorium & Hospital, and a number of cemeteries (including the Hong Kong Cemetery) are also located in Happy Valley.

Happy Valley is also the home of Hong Kong First Division's Happy Valley Athletic Association.

The area now known as Happy Valley was formerly known as Wong Nai Chung Valley, where Wong Nai Chung referred to a river collecting waters from Wong Nai Chung Gap and surroundings. The river nourished the rice paddies until the construction of Happy Valley Racecourse in 1846.

In early 1840, the British Army had set a military camp in the area. However, the camp was later closed due to the increasing number of soldiers succumbing to malaria. The cause of malaria was unknown at the time and the soldiers apparently suffered a then-unknown fever. Early settlers had suggested the area to be used as a business centre, but the suggestion was put off due to the valley's marshy environment, which was 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. As a result, the valley was renamed as Happy Valley, a common euphemism for cemeteries. In 1846, the British felt that the valleys terrain was ideal for horse-racing, and thus cleared the paddy fields and developed the Happy Valley Racecourse. For this, the Wong Nai Chung river was recoursed to Bowrinton Canal, known as Ngo Keng Kan locally, beside reclamation of Wan Chai. The canal is presently covered under Canal Road.
Happy Valley is now one of Hong Kong's highest class residential areas, with a high number of foreigners. Happy Valley's real estate prices usually influence the rest of Hong Kong's. Two of the tallest residential buildings in Hong Kong, "Highcliff" and "The Summit" are located in Happy Valley facing Mount Nicholson and the rest of Hong Kong.

Happy Valley also provides a number of high end restaurants and hotels, and is one rendezvous for many Hong Kong celebrities. Because of this, much paparazzi activities are present in the area. Many Hong Kong television series are filmed in Happy Valley, too.

The Happy Valley Racecourse is still operational today. Whenever a race runs, surrounding traffic patterns have to be changed: Cars will have to enter Happy Valley and the racecourse via Wong Nai Chung Road in a clockwise fashion, and the road may be heavily congested. The stadium lights in the racecourse illuminates nearby buildings even when the buildings themselves are unlit.