The deal to host a Valencia Grand Prix was signed on 1 June 2007, for a duration of seven years, between Bernie Ecclestone and the Valmor Sport group led by former motorcycle racer Jorge "Aspar" Martínez and Villarreal CF president Fernando Roig. The agreement was notable because Ecclestone had previously stated that no European country should hold more than one race per year, given the existing Spanish Grand Prix at the Circuit de Catalunya. The official track layout was unveiled by Valencia Councillor Mario Flores on 19 July 2007.
The circuit was first used competitively in late July 2008 for a round of the Spanish Formula 3 Championship and International GT Open. Its Formula One debut came on 24 August 2008, when Felipe Massa won the European Grand Prix from pole position.
The track measured 5.419 km and incorporated 25 turns — 11 left-handers and 14 right-handers. Estimated top speeds reached approximately 323 km/h. The lap record of 1:38.683 was set by Timo Glock during the 2009 European Grand Prix.
The pit straight was short and led immediately into a flat-out turn one before heavy braking for the right-left complex of turns two and three near the Grau Metro station. A curved "straight" fed into a left-right chicane at turns four and five by the Neptune Hotel. After exiting this section, drivers passed through kinks at turns six and seven before braking for the swing bridge section, where turn eight — with an apex speed of around 89 km/h — carried cars across the bridge. Following a heavy braking zone for turn ten, a kinked DRS zone with top speeds around 320 km/h led to a second-gear chicane at turns 12 and 13. Turn 17, a right-hand hairpin taken at approximately 97 km/h near the Museu de les Ciències Príncipe Felipe, was identified as one of the better overtaking locations on the circuit. A series of fast sweeping curves preceded turn 25, a final left-hand hairpin before the run to the start-finish line.
The circuit was widely criticized by drivers for its lack of overtaking opportunities. The straights were not fully straight and the dust off the racing line made passing difficult. The introduction of the Drag Reduction System and Pirelli tyres in 2011 improved the situation somewhat; 27 passes were recorded that year, 22 of which were assisted by DRS. However, only five non-DRS passes occurred, representing the second lowest total of the season. The 2012 race was considered one of the most entertaining editions, with multiple overtakes and four retirements creating an unpredictable result.
Robert Kubica noted the importance of good traction and braking stability due to the numerous long straights ending in heavy braking zones. Nico Hülkenberg commented that there was more room than typical of a street circuit and some corners had generous run-off areas.
The 2012 European Grand Prix on 24 June was the final race at the Valencia Street Circuit. The seven-year deal was never fulfilled, as the anticipated arrangement to alternate the circuit with the Circuit de Catalunya for a single combined Spanish Grand Prix fell through. The circuit was subsequently left abandoned, with no further use of the purpose-built sections.
The Valencia Street Circuit contributed to the period of Formula One expansion in the late 2000s that saw multiple new temporary and semi-permanent circuits added to the calendar. Its harbour setting and swing bridge created a distinctive visual identity that distinguished it from other street circuits. However, its five-year run produced no iconic moments to rival other street circuits, and the lack of overtaking and limited spectator atmosphere meant it was not mourned following its departure from the calendar. The circuit's abandonment became one of the more visible examples of the difficulties Formula One faced with temporary circuit arrangements that did not develop into permanent racing infrastructure.