Elves are the most difficult magical race to pin down. Some believe that the light elves live in Alfheim where Frey (agricultural deity) is their Lord, however, there has also been the enduring belief in folklore of the elves as faery-folk; beings associated with the natural world. To further complicate the beliefs, Norse folklore has a strong belief in Landvaettir, or land spirits who may fit into either or both these categories.

In Scandinavian folklore, which is a later blend of Norse mythology and elements of Christian mythology, an elf is called elver in Danish, alv in Norwegian, and alv or älva in Swedish (the first is masculine, the second feminine). The Norwegian expressions seldom appear in genuine folklore, and when they do, they are always used synonymous to huldrefolk or vetter, a category of earth-dwelling beings generally held to be more related to Norse dwarves than elves

The Scandinavian elves were of human size. Full-sized famous men could be elevated to the rank of elves after death, such as the petty king Olaf Geirstad-Elf, and the smith hero Völund (titled as "ruler of elves" in the Völundarkviða). Even crossbreeding was possible between elves and humans in the Old Norse belief. One case appears in Hrólf Kraki's saga, where the Danish king Helgi finds an elf-woman clad in silk who is the most beautiful woman he has ever seen. He rapes her and later she bears the daughter Skuld, who married Hjörvard, Hrólf Kraki's killer.

The elves of Norse mythology have survived into folklore mainly as females, living in hills and mounds of stones. The Swedish älvor (sing. älva) were stunningly beautiful girls who lived in the forest with an elven king. They were long-lived and light-hearted in nature. The elves are typically pictured as fair-haired, white-clad and like most creatures in the Scandinavian folklore can be really nasty when offended. In the stories, they often play the role of disease-spirits. The most common, though also most harmless case was various irritating skin rashes, which were called älvablåst (elven blow) and could be cured by a forceful counter-blow (a handy pair of bellows was most useful for this purpose). Skålgropar, a particular kind of petroglyph found in Scandinavia, were known in older times as älvkvarnar (elven mills), pointing to their believed usage. One could appease the elves by offering them a treat (preferably butter) placed into an elven mill – perhaps a custom with roots in the Old Norse álfablót.

The elves could be seen dancing over meadows, particularly at night and on misty mornings. They left a kind of circle were they had danced, which were called älvdanser (elf dances) or älvringar (elf circles), and to urinate in one was thought to cause venereal diseases. Typically, it consisted of a ring of small mushrooms. If a human watched the dance of the elves, he would discover that even though only a few hours seemed to have passed, many years had passed in the real world. (This time phenomenon is retold in Tolkien's Lord of the Rings when the Fellowship of the Ring discovers that time seems to have run more slowly in elven Lothlórien.

Three Rings for the Elven-kings under the sky,
Seven for the Dwarf-lords in their halls of stone,
Nine for Mortal Men doomed to die,
One for the Dark Lord on his dark throne
In the Land of Mordor where the Shadows lie.
One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them
In the Land of Mordor where the Shadows lie.

J.R.R. Tolkien, Three Rings for the Elven Kings