The great dungeon of Undermountain was built by dwarves some twenty-six centuries ago. It was conquered, in turn, by drow, duergar, and powerful wizards.
King Melair I discovered a vein of mithral beneath what would one day be known as Mount Waterdeep in –1,288 DR. Under his able rule, the foundations of the Underhalls of Melairbode were laid. The elf city of Aelinthaldaar occupied the surface above the Underhalls, and the dwarves and elves struck a bargain that has tied the two regions together to the current day.
In the year 168 DR, the wizard Halaster Blackcloak and his apprentices (known as he Seven) came to area. His goal was to explore the Underhalls and claim them as his own. He initiated nine expeditions (known as Halaster’s Hunts) to brutally exterminate the drow and duergar who had driven out the dwarves in centuries past. By 309 DR, Halaster ruled the Underhalls.
The Seven (Arcturia, Jhesiyra Kestellharp, Muiral the Mishapen, Nester, Marambra Nyghtsteel, Rantantar, and Trobriand) broke ties with Halaster in 307 DR in the hope of establishing their own holdings in the great depths beneath the mountain. Some left signs of their work that can still be seen today, but most of the Seven went insane or perished chasing their own dreams and desires. Only Jhesiyra escaped Halaster’s clutches, eventually becoming the Magister of Myth Drannor in 658 DR.
Beginning in 713 DR, Halaster and his apprentices embarked on a massive campaign to fill the dungeon with all manner of monsters and treasure. For many centuries, the land above forgot about the Underhalls, and in 889 DR the town of Waterdeep was established. It quickly grew in size and influence. However, the long centuries of monster population growth led to an invasion of the surface in 1037 DR. After repelling the invasion, the lords of Waterdeep struck an agreement with Halaster, urging him to keep the monsters of Undermountain in check.
In 1148 DR, the Netherese wizard Shradin petitioned Halaster for permission to establish Skullport. Shradin became the Lord of Bones, and Skullport flourished.
In response to the explorations of two noted adventurers, the Yawning Portal Inn was established in 1306 DR to limit access into Halaster the Mad Mage’s dungeon and to keep its monsters somewhat contained. This was also the year that Waterdeep began the practice of exiling the worst of its criminals to the depths of Undermountain.
Today, in response to a looming arcane disaster, Halaster attempted a ritual that resulted in the Mad Mage’s death. As his soul shattered, he was able to send visions to those with arcane connections and ties to Undermountain, warning them of the coming danger and urging them to save his beloved domain.