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The Werewolves are supporting antagonists in The Silmarillion.
They were a magical race created by Sauron and Morgoth when they corrupted the wolf Draugluin, who then sired numerous Werewolves. They were fearsome beasts that could walk upright, but also take the form of ordinary wolves as needed. Each Werewolf was inhabited by the spirit of a fallen Lesser Maiar, and like other Maiar-type races, they were also possessed of great longevity and power.
Come the end of the conflicts with Morgoth, it seemed that the Werewolves had been wiped out or else totally disappeared, but the ghastly legends surrounding them remained. It is also possible (even probable), that the Wargs who plagued Middle-earth for millennia after were descended from them.
Should the prophecy of Dagor Dagorath come to fruition, it can be assumed that the Werewolves will return for the final battle along with Morgoth's other creations and servants.
- Sauron himself was able to take on the form of a great wolf for at least a time, reflecting how he was the primary master of Werewolves (including the only two known by name), when they were prominent in Middle-Earth.
- Though Gandalf mentions that Werewolves are a part of Sauron's army, they are never actually seen in either the books, movies, or even video game adaptations (though they were going to appear in the cancelled video game Lord of the Rings: The White Council).
- Coincidentally, the high fantasy setting of The Chronicles of Narnia (written by Tolkien's friend, C.S. Lewis), also featured Werewolves, and like in Tolkein's setting, they were depicted as a malevolent race in service to a dark power (namely Jadis the White Witch).