Tol-in-Gaurhoth began as the Minas Tirith of Finrod Felagund, and was held by Orodreth for his uncle to guard the vale of Sirion. However, Orodreth was powerless to stop Sauron from taking the isle, and fled south. Sauron began breeding large wolves in the isle which he sent evil spirits into, turning them into werewolves.
Ten years later during the Quest for the Silmaril, Beren Erchamion, seeking the Silmaril, enlisted Finrod's aid, but they were captured passing the isle when Sauron defeated Finrod in a spell contest. Their companions were slain one-by-one by werewolves. Finrod saved Beren's life, but died himself.
Lúthien and the Hound Huan came to Beren's rescue, and Huan killed the wolves sent against him. After Draugluin was killed Sauron went out in wolf-form but was defeated. Lúthien got control over the isle's magic from Sauron, who fled, and Minas Tirith was reduced to ruins. Finrod was buried there. The isle remained clean afterwards, but after the Nirnaeth Arnoediad it was retaken by Morgoth and its towers rebuilt.