Aetherium is an incredibly rare, luminescent blue crystal found deep underground. The crystal has a strong magical aura, but it is alchemically inert and harmonically volatile, and no known conventional process can enchant, smelt, mold, bind, or break it. It was discovered by the Dwemer of Skyrim in their deepest mines some time in the First Era. Based on its name, the crystal may have some connection to Aetherius and the Aetherial Fragments which sometimes fall to Nirn, such as the meteoric glass harnessed by the Ayleids.
Circa 1E 221, the Dwemer uncovered a considerable source of Aetherium, primarily mined in the city of Raldbthar, which connects to Blackreach. Four Dwemer city-states, led by Arkngthamz, formed an alliance to oversee its extraction, processing, and study. An Aetherium Forge was created to smelt the crystal under precisely controlled conditions, far below the settlement of Bthalft in the Rift. The forge harnessed magma and was used to create artifacts of immense power, imbued with powerful enchantments. The alliance between the city-states shattered, with the four cities and their rivals vying for control of the forge. This conflict lasted decades and was known as the Aetherium Wars. This internal fighting weakened the city-states, which allowed for King Gellir's brief conquering of the Dwemer of Skyrim.
None of the city-states were successful in capturing the Aetherium Forge. The Great Lift to the Aetherium Forge was sealed, and the Aetherium Crest required to open it was shattered into four shards. The shards were scattered across Skyrim and guarded by the four city-states: Arkngthamz, Raldbthar, Bthar-zel (colloquially known as Deep Folk Crossing) and Mzulft. Following the disappearance of the Dwemer in 1E 700, scholars exploring their ruined settlements uncovered samples of the crystal, which were regarded as little more than a curiosity when it was proven impossible to work with.
The Nedes revered the constellations as gods, and used stones carved from Aetherium to bring them down to the earth as the Celestials. They also constructed apex stones using knowledge stolen from the Dwemer to bind the celestials to the mortal realm, found throughout Craglorn.
The Nord adventurer Katria researched the Aetherium Wars, although her findings were claimed and published by her apprentice, a Dunmer named Taron Dreth. Katria attempted to take credit for her work by proving the existence of the Aetherium Forge, but she died while exploring Arkngthamz. In 4E 201, her restless spirit helped guide and protect a fellow adventurer in recovering the four shards of pure Aetherium and bringing them to the Ruins of Bthalft. The adventurer used the restored Aetherium Crest to craft an artifact at the forge, and Katria's spirit was put to rest.
The Aetherium is embedded in Gold and Dwarven Metal to create Aetherial artifacts. Other materials such as Malachite, Ebony and Sapphire are also used. Crowns, shields and staffs can all be crafted with Aetherium. The artifacts have unique and powerful enchantments, such as the ability to turn enemies ethereal, summon Dwemer Animunculi, or harness the power of the Standing Stones. An aetheric lodestone is a perfectly round orb that is highly magnetic and threaded with veins of glowing blue Aetherium.