Arwen was the youngest child of Elrond and Celebrían; her elder brothers were the twins Elladan and Elrohir.

As told in "The Tale of Aragorn and Arwen", found in Appendix A to The Lord of the Rings (after the third volume, The Return of the King), during Aragorn's twentieth year he met Arwen for the first time in Rivendell, where he lived under Elrond's protection. Arwen, then over 2700 years old, had recently returned to her father's home after living for a while with her grandmother Galadriel in Lórien. Aragorn fell in love with Arwen at first sight. About thirty years later, the two were reunited in Lórien; at that time, Arwen reciprocated Aragorn's love; then they "plighted their troth" (promised themselves to each other) on the mound of Cerin Amroth.

Arwen's first appearance in The Lord of the Rings proper was at Rivendell, when the Hobbits arrived there, and Aragorn was seen with her — the first hint of their relationship. Later, when the Fellowship of the Ring came to Lothlórien, Aragorn remembered their earlier meeting and paused in reverence on Cerin Amroth.

Arwen entered the story again when, before taking the Paths of the Dead, Aragorn was met by a group consisting of Dúnedain (his people, from the North), and Arwen's brothers, Elladan and Elrohir. They brought to him a banner of black cloth: a gift made by Arwen, and a sign that encouraged him to take the difficult path. When the banner was unfurled at the Battle of the Pelennor Fields to reveal the emblem of Elendil in mithril, gems, and gold, it was the first triumphant announcement of the King's return.

Finally, Arwen arrived at Minas Tirith after Aragorn had become king of Gondor and Arnor, and they were married.

The four passages described above are Arwen's only appearances in the story as it stands, not counting The Tale of Aragorn and Arwen. Judging only by visibility, Arwen is mostly a minor character in Tolkien's The Lord of the Rings proper, but she nevertheless appears in detail in its Appendices. Also, she plays a role in the plot which is disproportionate to the number of scenes in which she appears. Arwen served as inspiration and motivation for Aragorn, who, as Elrond had stipulated, had to become no less than King of Gondor and Arnor before he could wed her. When Éowyn fell in love with Aragorn it was his fidelity to Arwen that prevented him from reciprocating. This partly motivated Éowyn's subsequent death-wish heroism during the Battle of the Pelennor Fields, which had major repercussions for the defence of Middle-earth.

The Tale of Aragorn and Arwen relates that Arwen had a son, Eldarion, and at least two unnamed daughters by Aragorn. She gave up her life and died of a broken heart in 121 of the Fourth Age, at Cerin Amroth, one year after the death of Aragorn. At the time, she was 2,901 years old.