Main article: Sauron in the Second Age
Although Sauron long knew than Men were easier to sway, he long sought to bring the Elves into his service as they had more power So after the War of Wrath Sauron decided that the Valar had forgotten about Middle-earth and he once again turned to evil. 
After lying hidden and increasing his power in secret, Sauron put on a fair visage, and calling himself Annatar, the Lord of Gifts, and in S.A. 1200 he befriended the Elvish smiths of Eregion, and counselled them in arts and magic. He never came to Lindon as Elrond and Gil-galad did not trust him and refused to treat with him, although they never realised who he truly was; elsewhere he was gladly received, especially in Eregion where the Elvish smiths learned much from him as their thirst for knowledge was great.
Under Sauron's tutelage the Gwaith-i-Mírdain, under the leadership of Celebrimbor, grandson of Fëanor, became more skilled than anyone else, save for Fëanor himself. In the year 1500, when they reached the very height of their power, the Elves began the forging of the Rings of Power, but Sauron knew all their secrets and in 1600 - ten years after the completion of the Rings of Power - Sauron created The One Ring to control the bearers of the other Rings.
But the Elves were not so easily ensnared, and as soon as Sauron put on the One Ring they and Celebrimbor were aware of him and realised they were betrayed. They hid their Rings from Sauron and did not use them, but Sauron demanded that the other Rings be given to him for they would not have been without him knowledge: the Elves refused and the War of the Elves and Sauron followed.