The Upside Down in the Stranger Things universe was created inadvertently by Eleven (El) on November 6, 1983, when she came into contact with a creature called the Demogorgon. This contact caused an inter-dimensional connection between Hawkins' reality (called the Right Side-Up) and a darker alien dimension known as Dimension X. The Upside Down is essentially a finite world that is a mixture of Hawkins and the environment of Dimension X, frozen in the moment of its creation on that date. Eleven's fear and psychic contact with the Demogorgon pulled elements from Dimension X into a dark, parallel copy of Hawkins, which became the Upside Down. It is not an active dimension constantly copying Hawkins but a fixed imprint from that moment, overrun by alien vines and spores from Dimension X.

Unlike a fully separate realm, the Upside Down overlaps with Hawkins, manifesting as a shadowy and hostile mirror. It has alien features but resembles Hawkins physically frozen in time. The creation of the Upside Down allows supernatural entities like Vecna and the Mind Flayer to access Hawkins through this dark alternate reality.

Dimension X is a related but visually distinct older alternate dimension where some creatures originate from; the Upside Down incorporates elements from Dimension X but is a separate finite copy created during Eleven's psychic contact event. The specific process of creation is not fully detailed but is confirmed to be linked to Eleven's actions and fear during the initial Demogorgon encounter.