The Valley of Lost Women follows on the heels of several "formulaic" stories in the Conan cannon. It tells the tale of Livia, an Ophirian girl who is taken captive by a remote tribe and attempts to strike a devil's bargain with the "white chief" Conan. What should be a fairly strait-forward story then takes a few turns that shake free of Howard's formulaic rut.
Howard spent time carefully researching a particular captive narrative, or account of European-American taken prisoner by a group of Native Americans, before sitting down to write this story (see the essay Hyborian Genesis in The Coming of Conan the Cimmerian). The extra work shows in a psychological verisimilitude that gives The Valley of Lost Women a depth and riveting fascination lacking in the formulaic stories. The sack of the village is particularly noteworthy and should be compared with the destruction of Conan's own village in Conan the Barbarian. There is the question of whether the deep racism present in this particular story is part of the captive narrative tradition or if it expresses Howard's own sentiments. It made for hard reading at points, but I leave the ultimate settling of the question up to the experts.
In keeping with the source material of the story, The Valley of Lost Women follows Livia, the captive, and not Conan as the main character. This gives us the first real chance thus far to see Conan as he appears to those around him. The portrait is far from sympathetic. Livia's terror-stricken flight at his coming is far more realistic than the other beauties who immediately wanted to jump into bed with the hulking brute. It comes as a surprise then when Conan releases Livia from her part of the bargain, that she sleep with him as the price of her freedom, and even offers to return her own land and people.
The above features restore a sense of freshness and momentum to the Conan stories, but The Valley of Lost Women still suffers from a few defects that undercut its power. The first defect, as already noted, is the blatant racism. We expect it from Livia, but not from Conan. The second defect comes in the weird twist. Howard's tone and eerie conception of the forbidden valley is spot on, but Conan's nonchalance after battling a creature from the Outer Dark goes far to undercut the scene's power. It's also not exactly in keeping with the superstitious barbarian Howard has presented elsewhere. At a deeper level, we could also question whether the carefully worked out verisimilitude of the first two chapters can really co-exist with the lovecraftian conception of the final chapter.
Defects aside, The Valley of Lost Women is a powerful piece of work. It presents a fresh look at Conan, reminds us again of the narrative possibilities presented by his world, and reaffirms his basic morality as something more than a "raping, pillaging, bastard." With this as a spring-board, it's no wonder that Howard was able to propel the character into the next phase of his development.