Shady Valley is an unincorporated community in Johnson County, Tennessee, and is located just outside of the Cherokee National Forest. Shady Valley is also the name of the valley in which the town is located. It is the second highest community in Tennessee at an elevation of 2785 feet, and it is situated between Holston Mountain to the northwest and Iron Mountain to the southeast. The town is located at the intersection of Hwy 421 and Hwy 91 in the middle of the valley.

Shady Valley is served by a Post Office assigned zip code 37688. The community is part of the voting district #6 area of the county.

Shady Valley is home to some historic cranberry bogs. These are cold adopted ecosystems, far south of their usual range. The valley once contained an estimated 10,000 acres of boreal cranberry bogs. The annual Cranberry Festival held the second weekend in October every year, celebrates the remaining cranberry bog. The annual festival includes food, music, a parade and auctions.

Shady Valley is also known for the famous Snake Motorcycle Ride. The local general store serves as the home base for this motorcycle route, and here you can get Snake Motorcycle memorabilia, food, gas and information. The community has two other small businesses, a US Post Office and the Shady Valley Elementary School.