The earliest known account of the Dwarfie Stone is in a Latin description of Orkney in 1529 by Jo. Ben, an unknown author, variously identified as John the Benedictine, or John Bellenden. Ben relates that the chambers had been originally made by a giant (i.e., in point of strength) and his wife, and that the latter was enceinte at the time, as was shown by her bed, which had the shape of her body. He was unable to account for the use of the door stone farther than that it was related that another giant, who was at enmity with the occupant of the stone and grieved at his prosperity, made the door stone to fit the size of the entrance so that the occupant might be shut in and perish from hunger, and that thereafter when he himself ruled the island he might have the stone for his own use. With this end in view the other giant took the stone, thus made, to the top of the mountain, and with his arms threw it down into the entrance. The giant inside awakened, and found himself in a quandary, being unable to get out, whereupon he made a hole in the roof with his mallets, and so escaped.

This extraordinary work has probably been the pastime of some frolicsome shepherd, or secluded devotee; and the history of the stone having been lost, it was natural for the people of a superstitious age and country to apply a fabulous origin both to the stone and its inhabitants, in so retired and lonely place as the vale of Rockwich. The story, therefore, goes, that the Dwarfie-Stone fell from the moon, and that it was once the habitation of a fairy and his wife, a water-kelpie.

At the west of this stone stands an exceeding high mountain of a steep ascent, called the Ward-hill of Hoy, near the top of which, in the months of May, June, and July, about midnight, is seen something that shines and sparkles admirably, and which is often seen a great way off. It hath shined more brightly than it does now, and though many have climbed up the hill, and attempted to search for it, yet they could find nothing. The vulgar talk of it as some enchanted carbuncle, but I take it rather to be some water sliding down the face of a smooth rock, which, when the sun, at such a time, shines upon, the reflection causeth that admirable splendour."-- Dr Wallace's Description of the Islands of Orkney, 1700, p52.

What was the original use of the cell, or by whom it was made, is unknown. There is, however, in Orkney, a tradition, that a monk from the Western Isles came to Hoy, where he led a recluse life ; and it may be supposed he is the person who hewed this stone into the form of a cell.

The Orkneys had sea-trows and hilltrows. All natural phenomena were regarded as the work of these supernatural agents, to whom worship was offered. A remarkable monument of this worship still remains on the hills of Hoy, the most mountainous of the islands. It is known as the Dwarfie Stone, and consists of a large detached block of sandstone, seven feet in height, twentytwo feet long, and seventeen feet broad. The upper end has been hollowed out by the hands of devotees into a sort of apartment, containing two beds of stone, with a passage between them.

The upper, or longer bed, is 5 ft. 5 in. long by 2 ft. broad, and intended for the dwarf. The lower couch is shorter, and rounded off, instead of being squared, at the corners ; it is intended for the dwarfs wife.

There is an entrance of about three feet and a half square, and a stone lies before it, calculated to fit the opening. Not satisfied with having provided such a solid habitation for the genius loci and his helpmate, the islanders were still in the habit, at no very distant period, of carrying propitiatory gifts to this fetich.

An echo is called, in Icelandic, 'dverg-mal' or dwarf-talk, and there is said to be a fine echo from under the Dwarfie Hamars. Then there is Trowie (Troll's) Glen to the westward of the stone. A troll or trow in old Icelandic lore is a huge creature or giant, mostly in an evil sense. Mr Heddle states that Trowie Glen is still considered an uncanny spot, and that people will go a mile or two out of their way rather than pass it after dark. In Jamieson's Scottish Dictionary, under Hill-Trows, it is stated that the superstitious in some places endeavour to bribe the trows by leaving an offering of food for them every night, being persuaded that otherwise they would destroy the family before morning. Probably this accounts for the offerings mentioned by Dr. Clouston as being left in the Dwarfie Stone.