Water Valley is a city in Yalobusha County, Mississippi, United States. THe population was 3,677 at the 2000 census.ACcording to the United States Census Bureau, the city has a total area of 7.0 square miles (18.2 km²), all of it land.AS of the census of 2000, there were 3,677 people, 1,470 households, and 961 families residing in the city. THe population density was 523.2 people per square mile (201.9/km²). THere were 1,675 housing units at an average density of 238.3 per square mile (92.0/km²). THe racial makeup of the city was 57.87% White, 40.74% African American, 0.33% Native American, 0.16% Asian, 0.22% Pacific Islander, 0.19% from other races, and 0.49% from two or more races. HIspanic or Latino of any race were 1.20% of the population.