Stanza 1 Summary

Get out the microscope, because we’re going through this poem line-by-line.

In the greenest of our valleys
By good angels tenanted,

This poem starts out on a pretty pleasant and relaxed note. The speaker is describing a valley, and not just any valley, but the greenest one we have. Who doesn't love a nice green valley?
Apparently this valley is inhabited ("tenanted") by good angels. That also seems like a pretty positive thing, right? (It sure beats the heck out of bad angels.)
One of the first things to notice, as far as poetic technique goes, is the enjambment in these lines. That just means that the first line isn't a complete sentence, but instead it spills over into the second line. Poe uses this trick a lot in this poem, so check out "Form and Meter" for more on that.

Once a fair and stately palace—
Radiant palace—reared its head.

"Once" is such a little word, but it does a lot here. It lets us know that we're in the past in this part of the poem, and that what the speaker is describing might not even exist anymore.
This awesome valley used to have a beautiful ("fair") and grand ("stately") palace in it. This seemed almost like it was glowing, it was so lovely (that's what the speaker means by "radiant"). The speaker also personifies the palace by comparing it to a living thing that "reared [lifted up] its head" in the valley. We wonder what's up with that move. Let's read on…

In the monarch Thought's dominion—
It stood there!

This palace used to stand in the kingdom ("the dominion") of the ruler ("the monarch") named Fred. No wait, the ruler's name was Thought. (And you thought your name was bad.) So… who is "Thought?" Well, maybe it's a personification of the idea of Thought. Our thoughts run our bodies and control our actions, so in a way, you could make an analogy between thought and a king. Let's hang on a sec, though, and we bet we'll learn more about what "Thought" is doing in this poem.
Poe pulls another trick in line six, where he suddenly throws in a really short phrase. This breaks up the rhythm of the poem, which so far has been written in something called "trochaic tetrameter." How's that? It just means a line with four pairs of syllables ("tetra-" means four), with the accent on the first syllable. A trochee, see, is a two-syllable paring in which the first syllable gets the stress and the second is unstressed. (If you say "beetle" out loud, you'll hear a real, live trochee—DAdum.) Line 5 is a great example of trochees in action. Line 6, in contrast, has just three words, with a pretty even stress on each syllable. For more on stress and syllables, check out "Form and Meter."
For now, just note that this sudden break in the meter forces us to pay attention to this line, along with the exclamation point, really focuses us on the haunted palace.

Never seraph spread a pinion
Over fabric half so fair!

The poem's speaker keeps coming up with compliments for the palace. Now he says that no seraph (that's a particularly special kind of angel) ever spread its wing ("pinion") over anything half so great as this palace (he refers to the palace as a "fabric," which is an old-fashioned word for a building). We call this kind of poetic exaggeration (twice as good as anything any angel has ever seen, man!) hyperbole.
As you can see from this line, Poe loves his fancy words, and he'd never pick a boring term like "angel" when he could use something as classy as "seraph" instead.