Jhaldrym was founded in 613 LE by drow colonists out of Tyelmantar. It was established as a peaceful fishing fish on lake Chaszmyr. This was done so as not to overtly threaten the local tribes of trogs and other intelligent groups of the area. It wasn't long though till it became bait for a military presence. Once this happened, it became a forward outpost for projecting Tyelmantar's influence and culture on the "barbarians". When the drow empire Eldalweril was established, Jhaldrym served as its capital for more than a millennia.
When Eldalweril fell in the High Down War, their Underdark rival Urthin-Mejin moved in and took claim of the city.