It is told in the history of the Eldar of Feanor and his Silmarils, and how they changed the fate of Middle-earth and brought the Noldor and the House of Feanor to ruin. But no tale but one was ever written concerning the making of these Jewels. The tale that follows is from the hand of Feanor himself, and was recently discovered in his ancient home at Tirion
-Elrond Half-Elven, Son of Earendil
It came into my heart that the light of the Two Trees of Aman should be captured, if possible. However, it would be to magnify and glorify this light rather than imprison it. So, I searched far and wide for jewels magnificent enough to house the splendor of the light. I found these jewels, deep in a cave below the holy mountain of Taniquetil, yet untouched by Vala, Maiar, or Elf.
As I came upon what seemed to be three stones, it came upon me that the sacred mountain, through the power of Manwe, had formed these jewels, and they were not the work of Aule. As I approached, an inner light radiated through those sacred jewels, an ideal housing for the lights of Valinor. I know not what type of jewels they were, and believe none but Eru Iluvatar knows. As I chiseled out the jewels, I found they were just fragments of jewels, with many more behind. Therefore, I gathered much more than was needed for one, from which sprang the three.
Taking the shards back to my smithy, I set then down and began straight away to my labor. First, I put forward all of my skill to make these shards into spheres worthy to hold the glory of Valinor’s lights. Every day for two years I hammered and shaped the shards, at great cost. For during this time my first child, Maedhros, was born. However, my skill formed the fragments into three perfect spheres which I deemed worthy to hold the light.
With my three jewels in hand, I secreted my way to the bases of Telperion and Laurelin. Placing two of the jewels on the ground, I waited for the mingling of the lights. When this occurred, I thrust the first jewel between the Two Trees. For an hour I stood there as one made of stone. When the mingling of lights ceased, I withdrew the jewel. I discovered that the light of the trees had indeed become imbued inside the jewel. For two more days I did this until each Jewel was filled with the light.
With my work clutched to my breast on the fourth day, I advanced to the throne of Manwe while I covered with a dark cloak. I bowed on one knee and place my work at his feet. He laughed and bid me rise, calling my work blessed, and summoning a council of the Valar. There, they hallowed my work, and Mandos declared that the fates of Arda lay locked within my work.
Here the account of Feanor, son of Finwe ends. Morgoth, the Enemy of the World, eventually stole the Silmarils from Feanor and kept the throughout the War of the Jewels, until they were recovered by Beren Erchamion and the Valar during the War. However, the Jewel taken by Beren passed to Earendil, whence it became a star shining in the West. Maedhros and Maglor, the only surviving sons of Feanor, stole the remaining to from the Valar. However, the sacred Jewels burned them and Maedhros cast his deep into the Earth while Maglor sent his into the depths of the sea.