Palm Valley emerged from the area of St. Johns County known as Diego Plains. Diego Plains was named during the First Spanish Period after Don Diego Espinosa, who owned a large ranch in the area. The Spanish later fortified Espinosa's ranch and provided a contingent of soldiers and a small complement of arms. The ranch became known as Fort Diego and helped protect the road to St. Augustine from the north. This road was known as Pablo Road and extended from St. Augustine to Pablo Creek, near modern-day Mayport. In 1740, the fort was captured by British forces, led by General James Oglethorpe during his St. Augustine campaign.