Ghost elves dwelt on the fringes at elven society. They made their homes amid the ancient roots of the forests, rarely making contact with other races. Over time the ghost elves grew more and more isolated, eventually becoming little more than a legend.
Thousands of years ago, during the elven civil war that led to the fall of the drow, the ghost elves maintained their isolation and remained neutral in the great racial struggle. After the defeated draw retreated into the Underdark, they schemed against their distant cousins and soon launched an assault on the ghost elves. The very shelter that had kept the ghost elves safe became fiercely contested battlegrounds. The peaceful ghost elves were no match for the seasoned dark elven troops and were easy fodder for the sacrificial altars of Lolth. They were virtually wiped out in the blink of an eye. The other surface elves were either unwilling or unable to aid their beleaguered kin, something the ghost elves have never forgotten or forgiven.
Help eventually arrived - from an unexpected source. As the defenses of the last settlement were collapsing, an alien entity calling itself Thule appeared and offered to save the ghost elves in return for their service. Appalled at the slaughter of their people the ghost elven leaders agreed without a second thought, signing the contract that Thule proffered.
They were foully tricked. Tule revealed himself as the Archduke Thulikazt, a pit fiend of almost godlike power, and took the ghost elves to his home in the Nine Hells of Baator. There he enslaved them, slowly destroying their spirits and their strong connection to the land. The ghost elves called upon their deities to save them, but to no avail - Thulikazt's bargain was binding. For hundreds of years. they toiled for the archfiend, and thousands were slaughtered in savage arena battles and pointless experiments for Thulikazt's pleasure. Ghost elven historians call this time "the Tempering."
Countless centuries passed and Thulikazt crew lax, allowing his slaves (whom he believed completely broken) to take up arms and join his forces in the Blood War. The ghost elves learned the arts of war and conquest from fiendish generals and hellish sorcerers. They became Thulikazt's elite bodyguard, drawing admiration and envy from other fiends. This would prove the archduke's ultimate undoing.
The ghost elves secretly contacted their masters enemies and offered to serve those lesser fiends in return for aid in destroying their hated master. Greedy for the service of Thulikazt's elite troops, the baatezu lords formed an alliance to lay siege to his citadel. The ghost elves used the battle as a distraction, killing Thulikazt and opening a gate to the Material Plane in the confusion. When the fortress finally fell, the fiendish generals found only Thulikazt's mutilated corpse and a note of thanks. The ghost elves had won their freedom.
Fearing fiendish retribution, the ghost elves searched for somewhere to hide. It was then that they noticed a startling change in themselves: By severing their connection to the earth, Thulikazt had accidentally gifted the ghost elves with a strange connection to the Ethereal Plane, granting the most powerful ghost elves the ability to slip between the material world and the Ethereal Plane. Upon coming to grips with their newfound powers, the ghost elves set about creating a portal to the Ethereal Plane, and one stone at a time, they transferred materials to the Ethereal Plane to build their new homes.
On Avalorn, Ghost Elves are more myth and legend than reality. Those that are found here hail from Ghosttown, a city for outcasts built in the roots of the trees where the Capital city of Lorienheim is.
Few know how they came to be here, but those that do know the truth understand that they are here by the will of the God Zifen Cardnil. In one of his battles against the Queen of Chaos in the Abyss, it is said that he came upon a number of Ghost Elves in force service and freed them from their demonic masters. Since then, they have lived on Avalorn and are devout worshippers of the Elven God.