The Valley of Josaphat (variants: Valley of Jehoshaphat and Valley of Yehoshephat) is a Biblical place mentioned by name in Joel 3:2 and Joel 3:12: "I will gather together all nations, and will bring them down into the valley of Josaphat: and I will plead with them there for my people, and for my inheritance Israel, whom they have scattered among the nations"; "Let the nations be roused; let them advance into the Valley of Jehoshaphat, for there I will sit to judge all the nations on every side".  

By one interpretation, this describes the place where, in the presence of Josaphat, King of Judah, Yahweh annihilated the Gentile coalition of Moab, Ammon and Edom. This may have indicated an actual valley euphemistically called by the Jews êmêq Berâkâh ("valley of blessing"), situated in the desert of Teqo'a near Khirbet Berêkût, west of the Khirbet Teqû'a (about eleven miles from Jerusalem). Alternatively, it may refer to an indeterminate valley of judgment, since "Josaphat" means "Yahweh judges". In Joel 3:14 the same valley is called "valley of destruction" (A. V. "valley of decision"). The chapter in question describes how the nations that afflicted Judah and Jerusalem during their Babylonian captivity and return from exile shall receive Divine Judgment. 

In the fourth century, in the Bordeaux itinerary, the Cedron takes the name of Valley of Josaphat. Eusebius and St. Jerome strengthen this view (Onomasticon, s.v.), while Cyril of Alexandria appears to indicate a different place; early Jewish tradition denied the reality of this valley. Subsequently to the fourth century, Christians, Jews and Muslims regard Cedron as the place of the Last Judgment. What has lent colour to this popular belief is the fact that since the time of the kings of Judah, Cedron has been the principal necropolis of Jerusalem. Josias scattered upon the tombs of the children of Israel the ashes of the idol of the goddess Astarte which he burned in Cedron (2 Kings 23:4).  

It was in Cedron that the Tomb of Absalom with its "hand" was set up, and the monument of St. James and of Zachary. The ornamental facade of the tomb said to be that of Josaphat has been completely walled up by the Jews, who have their cemeteries on the flanks of the Valley of Cedron. They wish to stand in the first rank on the day when God shall appear in the Valley of Josaphat. 

The designation of a Valley of Jehoshaphat is applied as a specific toponym for the first time by the pilgrim of Bordeaux, in 333. Since then it has become a general designation for the Kidron Valley, between Jerusalem and the Mount of Olives, which is repeatedly mentioned in the Old Testament and the New, under its own name. Many Christians believe that the Last Judgment will be held in the Valley of Jehoshaphat, interpreting the passage in the book of Joel:  I will also gather all nations, and will bring them down into the valley of Jehoshaphat, and will plead with them there for my people and for my heritage Israel, whom they have scattered among the nations, and parted my land. (KJV)  http://en.wikipedia.org/wiki/Valley_of_Josaphat