The Silmarils were the Great Jewels created by FŽanor during the Years of the Trees. In these gems he placed the light of the Trees of Valinor before they were killed by Morgoth. The gems were later stolen from the Stronghold of Formenos by Morgoth, and set in his dark crown. They remained there for a long while in his fortress of Angband.
FŽanor made an oath to recover his prized gems, and thus with many of the Noldor sailed from Valinor to Beleriand and made war upon Morgoth. FŽanor was killed during this struggle, as well as many of the other Elf-Lords who assisted in the fight. All the Elf cities were eventually destroyed, and only one Silmaril was ever recovered from the crown. This feat was accomplished by the lovers Beren and Lķthien. This Silmaril was later given to Ešrendil, who sailed with it across the sea to ask for the aide of the Valar.
The Valar sent a great force to Middle-earth to counter Morgoth, and he was completely defeated. Only two of the sons of FŽanor survived this war (later called the War of Wrath), Maglor and Maedhros, and they stole the Silmarils from the Valar; but their evil-doings in attempt to find the gems caused them to feel great pain when touching the Silmarils, so eventually Maedhros cast himself into a great fiery pit to escape the pain, and with him went the Silmaril. Maglor later threw the other Silmaril into the ocean, so that now, only one Silmaril can still be seen: on the brow of Ešrendil as he sails the sky.