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In 1871, industrialist James Thompson built a textile mill in the village. Nearly all village residents worked in the mill and schoolchildren ran home when the mill's lunch whistle sounded. After its height of operation in the 1970s, it entered a decade of decline. The mill had been vacant for at least 10 years when it went up in flames in the early morning hours on April 22, 2009.
By 1863, Valley Falls had established itself as a mini-industrial center. In addition to the aforementioned Thompson textile mill, the village also had a blacksmith shop, farrier shop, foundry, wainwright shop, cooperage, vineyard, three general stores, and two hotels. At this time only a single rail line (Troy & Boston RR) from Troy passed through the southern limit of the village, heading to Johnsonville. Later, a second rail line from Schaghticoke would follow the Hoosic River past Thompson's Mill, also heading to Johnsonville. By the early 1970s, the southern rail line was completely abandoned and had been largely dismantled; the northern line still functions to this day. However, with the closing of the Thompson mill, the train no longer stops in Valley Falls.
Valley Falls in the hometown of Allan C. Balch, public utilities executive and namesake for Cornell's Balch Hall.
The Adams–Myers–Bryan Farmstead was listed on the National Register of Historic Places in 2013.
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