From Wiki explanation;valve editor is:

Valve Hammer Editor
, formerly known as Worldcraft and now commonly called Hammer, is Valve Software's map creation program for their game engine, Source. Old versions of Worldcraft also supported Quake and Quake II. Versions prior to 4 supported exclusively Goldsrc, Source's predecessor. The current version supports both Source and GoldSrc, and can only be accessed via a free download of the Source SDK.

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Configuration steps for valve hammer editor; click here and follow the screenshots.