The Svartalfar live in Svartalfheim. In some sources they are identified with the dwarfs of Nidavellir, who likewise had a reputation as skilled smiths. In general, however, elves and dwarfs are distinguished in surviving Norse literature.

Before they became diminutive and whimsical, elves were probably akin to powerful pre-Christian forest spirits like the woodwose, the Green Man, and the drusi in the mythology of the Gauls beings to be respected and even feared. A trace of the former importance of elves in Germanic culture exists in names like Alfred (Old English lfrd, "elf-counsel") and Alvin (Old English lfwine, "elf-friend").