The canyon was formed in prehistoric times by the Melendiz Çayı. It lies between the villages of Ihlara in the southeast and Selime in the northwest. At the north end of the village of Ihlara, there is a stairway with almost 400 steps, which descends over 100 m down into the canyon. From the 7th century AD, the valley was settled by Byzantine monks who dug their houses and churches out of the tuff stone, which had been deposited by the eruptions of Mount Hasan. The earlier Greek name, Peristrema (Περιστρημα; winding round) of the village of Belisarma which is located about halfway along the valley from Ihlara to Selime, gave its name to the valley as well.