Ost-in-Edhil was established by the Ñoldor during the early parts of the Second Age, located where the Sirannon met the Glanduin. A large road was erected to the West Gate of Khazad-dûm under the shadow of the Misty Mountains (Hithaeglir), to facilitate communication and trade between the Dwarves and the Elves.
Ost-in-Edhil was ruled by Celebrimbor, the founder and leader of the Gwaith-i-Mírdain and the grandson of Fëanor. Here the Ñoldor created the Rings of Power with knowledge given to them by Sauron, posing as Annatar, the 'Giver of Gifts'. When Celebrimbor discovered Sauron's plan to ensnare them, he hid the rings and did not use them ever again and refused Sauron's demand to surrender all the others. This started the War of Sauron and the Elves and during the war Ost-in-Edhil was completely destroyed by Sauron's forces, but its ruins survived into the Third Age.
The Fellowship of the Ring encounters the ruins of Ost-in-Edhil shortly before reaching Moria, and Legolas hears the stones speaking of the Elves of Eregion:
"Deep they delved us,
High they built us,
Fair they wrought us,
But they are gone."
- Ost-in-Edhil was Sindarin for 'Fortress of the Elves'.