Ugna's family originally comes from Belegost, in the Blue Mountains. At the beginning of the second age however, after the War of Wrath had destroyed their home, they saw no other option than to migrate to Khazad-dûm.

They lived and prospered for centuries there, until their digging for mithril awoke a monstrous beast from the depths of the mountains. It wreaked a dreadful destruction, in which it had killed a great number of dwarves, among them also their kings Durin VI and Náin I. Having nothing left, Ugna's forefathers fled once again, to the Iron Hills, far to the east, even beyond the lonely mountain.

It is there that Ugna was born and grew up. Her father was a miner, and her mother a jeweler. From an early age on, Ugna started to show an interest in making jewelry too. Playing with her mothers pile of rejected gems, she made all sorts of necklaces, bracelets, circlets, and hair beads. She just loved how the stones would sparkle as she danced around, like rippling water.

In her teenage years, the orcs, goblins, and wargs in the region started to grow in numbers, and slowly changed from a minor nuisance to a serious threat. Ugna felt that she needed to make herself more useful, and became a weaponsmith. She discovered the joy of forging all kinds of weaponry to aid the dwarves in the defense against the orcs.

At first she learned all that she could from the master smiths of the Iron Hills, but as she became more proficient over the years, Ugna started experimenting with different designs and materials. To give her own personal weapons some sort of their own style, she added pulverised scraps of gemstone to the molten metal. As she swung her axes and swords around, the sunlight gave them the sparkle she so loved from her childhood jewelry.

After the battle of the five armies, Dáin Ironfoot and his army left the Iron Hills to move back to the Lonely Mountain. The dwarves that chose to stay in the Iron Hills, among which were Ugna and her family, were too few to sustain themselves. They decided to move back to the Blue Mountains, the area where their forefathers originated from.