Two groups of gods, the Vánir and Æsir, are at odds. The Vánir send the female Gullveig ("Gold-Drunk;" she may be Freyja in disguise) to corrupt the Æsir. Seeing through the ruse, the Æsir treat Gullveig badly and expel her.

The Vánir are outraged at the treatment of Gullveig and declare war. Neither side can prevail, so hostages are proposed. The Æsir send Mímir and Hœnir; the Vánir reciprocate with the father and son, Njorðr and Freyr. Frey's sister Freyja accompanies them by choice. Hœnir seems slow-witted and therefore an unacceptable hostage. The angry Vanir behead the "good" hostage, Mímir, in vengeance. Óðinn preserves the head and seeks its advice in times of need. Afterward, a permanent truce prevails.

In the Prose Edda, Snorri uncritically presents this mythical account. Elsewhere, in a work called Heimskringla, Snorri the scholar offers a Euhemeristic explanation. He suggests (incorrectly) that the story is about a battle between two tribes, one living along the river Ván and the other from Asia.

Georges Dumezil's New Comparative approach sees the conflict as one between rulers and peasants, two of the three moieties of Indo-European society.