Borrowdale is shaped like a bottle. The wide end opens at Derwentwater, where the River Derwent slides out of the valley and into the lake. The narrow neck, two miles upstream, squeezes between Castle Crag and Grange Fell in a tight rock-walled defile known locally as the Jaws of Borrowdale. South of the Jaws the valley opens again into a broader basin around the village of Rosthwaite, then forks. One arm climbs west toward Honister Pass and the slate mines. The other runs south to Seathwaite, statistically the wettest inhabited place in England, where rain piles off the surrounding fells and feeds the river. The waters of the Derwent here begin as drips from the highest ground in the country - Scafell Pike, Great End, the Glaramara ridge - and arrive at Derwentwater carrying the runoff of a small Welsh-scale wilderness.

The Borrowdale graphite deposit is unique on Earth. Most graphite is impure and crumbly. The Seathwaite stuff was solid enough to be sawn into sticks - pure carbon, deposited around 400 million years ago in a single catastrophic geological event tied to the same Ordovician volcanism that built the surrounding peaks. The locals first used it as sheep-marker, then as a black pigment, then, by the late 16th century, as the heart of the world's first pencils. The Crown took notice. Borrowdale graphite was so valuable that the mine became a guarded national asset, with armed guards and a careful schedule of openings designed to keep prices high. Smugglers grew rich on stolen blocks. When the original vein was finally exhausted, German chemists worked out how to mix graphite powder with clay - a process still used today - and the pencil industry kept going. But the valley where it all started has never had a rival. The graphite find remains unique.

Borrowdale is not crowded. Despite welcoming a steady stream of walkers, climbers and tour buses, the civil parish itself recorded just 417 residents in the 2011 census, living in 128 households across the settlements of Grange, Rosthwaite, Seathwaite, Seatoller, Stonethwaite and Watendlath. The numbers are slowly falling. Stone cottages that once housed families of farm labourers now serve as holiday lets and guest houses. The valley still works - sheep on the fells, the slate mine at Honister, a working farm or two - but its dominant industry is hospitality. Visitors come for the walks, the youth hostels, the campsites, the wood-fired pubs and the certainty that someone, somewhere in the next ten miles, will sell them a pot of tea.

In 1923 the novelist Hugh Walpole bought a house called Brackenburn, on the western slope above Derwentwater, with a view straight down into Borrowdale. He lived there until his death in 1941. The valley became the setting for his Herries Chronicles, a four-novel saga about a fictional family rooted in Borrowdale across three centuries. Walpole based the family seat - Herries - on Hazel Bank, the real-life home of his friends the Simpsons. He described the valley in sympathetic and accurate detail: the way mist clings to the crags after rain, the angle of light on the fells in autumn, the sound of the Derwent under a wooden footbridge. The novels are largely out of print now. The valley they were written about is still there, more or less unchanged, which is the kind of immortality Walpole would probably have preferred.

There is a quality of light in Borrowdale that is hard to explain to anyone who has not stood at Grange on a clear morning. The valley faces north, the surrounding fells are dark with bracken and stone, the lake reflects whatever sky it is given. After rain - and there is always rain - the air clears to a hard brilliance that picks out every rock face, every wall, every white sheep on every hillside. The Borrowdale Volcanic Group, the geological formation that gives this whole region its bones, is named after this valley. Standing beside the Derwent and looking south up at Castle Crag, you are looking at the same andesitic ash and lava that built Scafell Pike. The pencil came from here. So did, in a sense, much of the modern Lake District itself.