Police prevent Roma children and their parents from appealing for help at the local commune offices
Officers armed with truncheons and shields moved in to the settlement in the Paris suburb of Evry, where he was mayor for 11 years from 2001.
By late morning more than 70 people including women and children had been evicted from caravans and makeshift huts, with most expected to be returned to Romania.
The raid is particularly significant because it shows the Socialist firebrand is determined to 'clean up illegal immigrants in his own back yard', said a party colleague.
The source added: 'Valls particularly wants to end the Roma problem - by breaking up a camp in his constituency he is showing he means business.'
A deportation order for residents of the camp was signed by the local Socialist mayor Francis Chouat who said: 'In addition to being unhealthy, the site is extremely dangerousness.'
Mr Chouat said the site overlapped a commuter train route into Paris, and was close to potentially fatal power lines. At 7am young children could be seen dragging suitcases and bags away from the site, along with bicyles.
'The police arrived at 5am,' a 22-year-old Romanian called Lakatos told French radio. 'I do not know where to go now - perhaps to a hotel, perhaps to a charity.'
Many had expected France's new socialist government to have a relaxed approach to illegal immigrants, but Manuel Valls has quickly killed that illusion
Hundreds of other Roma left a nearby wooded camp on Ministry of Interior land after receiving an eviction order on Sunday.
Mr Valls ordered the destruction of numerous Roma camps across France earlier this month, with sites broken up in Lille, Lyon and Marseilles, as well as Paris.
The policy being pursued by France's socialist government was formulated by former conservative president Nicolas Sarkozy, who was frequently accused of pandering to the far right.
His government linked Roma camps with crime, suggesting that many of the thieves and muggers operating in big cities were homeless Romanians.
Neighbours of the camps often complained about noise and anti-social behaviour, as well as serious crimes, said Mr Valls.
Humanitarian organisations have also linked the camps to ill health, including serious diseases such as tuberculosis.
Manuel Valls, fascist disguised as a socialist
Mr Sarkozy started a purge on Romas in the summer of 2010 in France, where up to 15,000 live.
In turn, Roma groups accused Mr Sarkozy of 'ethnic cleansing', pointing to the fact that gipsies had been targeted by the Nazis during the Second World War.
They said that the purge was all part of a generally racist strategy adopted by Mr Sarkozy against all foreign groups, including some six million Muslims living in France.
Romania has been a full member of the European Union since 2007, and its citizens can enter France without a visa.
But they must get residency permits if they want to settle long term and work.
Britain, like France, has transitional controls on Romanians seeking to settle in the UK.
Until next year only those Romanian migrants who have a job or can support themselves are allowed to stay in Britain.
French Prime Minister Jean-Marc Ayrault has called for a European Council meeting to make decisions "at the European level" on the Roma - many of whom also come from Bulgaria Bulgaria.
Untermenschen français
Despite the evictions and deportations, Mr Ayrault has pledged to make it easier for those Roma who are allowed to stay in France to get jobs.
Last Thursday the Romanian government issued a statement welcoming 'the French government's decision to ease the Romanian and Bulgarian citizens' access to the French labour market.'
Evry is a new town which was built in the 1960s to accommodate overspill from Paris's growing immigrant community.
It now has one of the youngest populations in France - the average age is just 26 - with many residents coming from African and North African Arab backgrounds.
Despite the ethnic mix, and the fact that it is viewed as a 'Socialist town', locals in Evry frequently complain about non-regulated accommodation, which includes a large number of squats, as well as the kind of Roma camp which was shut down.
Manuel Valls - who is nicknamed 'the Sarkozy of the Left' - was returned as mayor of Evry during 2008 elections with 70 per cent of the vote. This was further evidence of Evry being the safest Socialist constituency in France.
The legal method by which the French authorities are able to clear the camps is by claiming they are a hazard to the local community.
In the Evry case, the local mayor acted on local concerns by arguing that the settlement created public health problems, and was also dangerously close to a commuter railways line.
A young girl stands next to a pushchair laden with belongings, after her family were expelled from their homes this morning
Officially he then 'applied' to a local judge who - on Interior Ministry advice - agreed that the camp should be 'evacuated'.
In reality, the Interior Minister would have the ultimate say on whether camps should or should not be shut down.
Of the Roma kicked off sites in cities like Lyon and Lille earlier this month, some 90 per cent have since been deported by plane.
Adults returning to Bucharest receive 300 euros, while children receive 150 euros.
This means that a small, impoverished family can easily 'earn' more than 1000 euros from a single deportation.
Accordingly, many families are more than happy to be deported for a few weeks, before returning to France at a later date.
Nazi soldiers rounding up Roma gypsies
Contemporary Germany does not complain from the gipsy problem.
Did they solved the integration problem?
What was and is the reason?
Let them share their solution.
Anyway, in case Mr. Hollande has his own ideas, let him prove them in his own country.
It is not reasonable to request from the others what you are not ready to provide yourself.