The Valley and Siletz Railroad was incorporated in 1912 by the Cobbs & Mitchell Lumber Company, and construction started 1913. The line was opened all the way to Valsetz by 1920, where the line purchased about 2 miles of track from the Siletz Lumber & Logging Co. The total length of the line was about 40 miles. The primary goal of the railroad was to move forest products, but there was some other traffic generated from agriculture along side the line. The line connected with the Southern Pacific at Independence, and crossed the Dallas to Airlie branch of the Southern Pacific near Simpson. Originally this was the line's connection to the rest of the railroad network, but the Southern Pacific abandoned that section of line in 1927. The V&S then moved their connection to Independence by constructing about a mile of track.

There was a log dump spur which went to the south of the town of Independence and then ran along the Willamette River. The V&S abandoned this spur around 1958.

The community of Valsetz was a lumber company town, and the name of the community was simply a contraction of the railroad company that served it. In addition to logs, the company also provided passenger and mail service to Valsetz, which was otherwise rather isolated, until 1952.

The company shops and headquarters was located as Hoskins. In the course of its history, the line owned 8 steam locomotives. The line appears to have converted to diesel power in the late 1950's. All of the diesels were various sizes of General Electric small industrial locomotives. The line also owned three self-propelled gasoline powered passenger cars. A passenger timetable from 1918 shows a daily except Sunday train leaving Valsetz and 10:55 a.m., and arriving at Independence at 2:40 p.m.

In 1930, an attempts was made by the Oregon Electric Railway to purchase the railroad and construct an extension over the Willamette River to their main line to Eugene. The Cobbs & Mitchell company, as well as other shippers, communities and other parties supported this proposal. However, since the Southern Pacific had a monopoly on business from the line, they protested the move. The Interstate Commerce Commission ruled that if any company should purchase the line it should be the SP. According to the SP, they had a monopoly on traffic from that railroad, and they had no interest in actually purchasing it. According to Austin and Dill, the SP did actually take control of the V&S, but this take-over was ruled illegal in 1931 by the ICC. During the ICC hearings, testimony revealed that there was enough lumber along the line to last another 35 or 40 years.

After several changes in ownership of the parent company, Boise Cascade wound up being the owner of the line.

In the late 1970s, Boise Cascade determined that the line (and the entire town of Valsetz) was surplus to their needs, and the line was abandoned in segments: Operation from Pedee to Valsetz was eliminated in early 1979, and by the end of 1979 only three miles of track were in operation at Independence. Soon only 1.8 miles of track were in operation.

The remains of the line was purchased in late 1984 or early 1985 to the Willamette Valley Railroad Company. This company continued to operate the line to the Mountain Fir Lumber Company until this lumber facility closed in May of 1992. The railroad is now dormant.