Jhaldrym was founded in 613 LE by drow colonists from Tyelmantar. It was established as a peaceful fishing village on the shores of Lake Chaszmyr, in order to avoid overtly threatening the local tribes of troglodytes and other intelligent groups in the area. However, it soon became a military stronghold, transforming into a forward outpost for Tyelmantar to project its influence and culture onto the "barbarians" of the region. When the drow empire of Eldalweril was established, Jhaldrym served as its capital for over a millennium.
When Eldalweril fell in the High Down War, their Underdark rival Urthin-Mejin seized the opportunity and laid claim to the city.