Lake Valley was originally located north of its present site and took its name in the 1870's from nearby relic lake beds, when it was only a small stage stop. After that location was flooded, the settlement moved about a mile to the southwest, then moved again in 1882 to its present location after the discovery of an unusually large and pure silver ore body. This deposit was called the "Bridal Chamber" for the sparkle of its crystal-encrusted walls. During the 1880's and early 1890's, Lake Valley reached a population of up to 4,000, with more than a dozen saloons and newspapers, along with general stores, businesses, and hotels. After the bust of 1893, it became a virtual ghost town. In 1895, the Main Street business district burned, and an influenza epidemic in 1918 dealt another blow, followed by the Great Depression of the 1930's. As part of the nation's Work Projects, a road, now abandoned, was built from Lake Valley due east to the Rio Grande River. Beginning in the 1920's and continuing as recently as the 1950's, manganese, needed to make high-quality steel, was mined there.