A palantír (sometimes translated as Seeing Stone but actually meaning "One that sees from afar") is a stone that functions somewhat like a crystal ball. When one looks in it, he can communicate with other Stones and anyone who might be looking into them; people of great power can manipulate the Stones to see virtually any part of the world. They were made by the Elves of Valinor in the Uttermost West, almost certainly by the Ñoldor and possibly by Fëanor. Many palantíri were made, but the number is not known. Some had power over other Stones. The stones had various sizes. The smallest had a diameter of about a foot, while the largest filled a large chamber. The master stone was kept in the tower of Avallonë on Tol Eressëa. They are known to have a power over people, as seen from the experience of Peregrin Took and the Orthanc-stone.
Some of the stones were given to the Dúnedain of Númenor as a gift, during the Second Age. Of these, Elendil took seven with him on his flight to Middle-earth, and in time they were distributed among seven places: four in Gondor and three in Arnor. By the end of the Third Age, three had been lost forever, one was locked in Elostirion, one was buried amongst the ruins of the Dark Tower of Barad-dûr and a sixth had been rendered virtually unusable. The seventh stone was retained by the king of the Reunited Kingdom.
- The Stone of Osgiliath was the largest stone among the seven, and chief among them. It was placed in a prominent building in the capital city of the kingdom of Gondor. The ceiling was painted to resemble a starry sky, and gave its name (os-giliath, the Dome of Stars) to the city itself. This Stone was the first to be lost: during the civil war of the Kin-strife around the middle of the Third Age, it fell into the river Anduin.
- One Stone was placed in the tower of Elostirion in the Tower Hills, just west of The Shire. Until it was taken back to the West with the three Elven Rings, it could be used to look along the Straight Road to Avallonë.
- The other two Stones in Arnor were those of the watch-tower of Amon Sûl and the city of Annúminas. Both of these were lost when Arvedui Last-king was shipwrecked in the Ice-bay of Forochel, in T.A. 1975.
- One Stone was placed at Minas Ithil in the mountains that came to be known as the Ephel Dúath. When Minas Ithil fell to the Nazgûl, the Ithil-stone was taken to the Barad-dûr and used by Sauron. It was presumably destroyed at the fall of Sauron.
- One Stone was placed at Orthanc, the great tower built by the Dúnedain in the Second Age at the southern end of the Misty Mountains. It fell into the hands of the wizard Saruman, who used it to garner information on his neighbors and their activities. The stone was also partially responsible for Saruman's fall from grace, as he was using it when he came upon Sauron, and was ensnared by him, though his transformation to one of the fallen Maiar had undoubtedly begun much earlier. Saruman later used the stone to confer with Sauron through the Ithil-stone in Barad-dûr, and plan much of their mutual cooperation throughout the War of the Ring. This communication likely influenced his decision that resistance against Sauron was futile.
Later, Gríma, also called Wormtongue, cast the stone down from Orthanc, where it was recovered by Peregrin Took and turned over to Gandalf. Peregrin inadvertently contacted Sauron, after which Gandalf turned the stone over to Aragorn.
Using the stone, Aragorn declared himself as the heir of Isildur to Sauron, seeking to distract him from Frodo. Sauron was led to believe that the One Ring had fallen into the hands of Aragorn or some other Western leader, and this was partly responsible for Sauron's hasty assault against Gondor. Sauron's attack, before he was fully ready, deeply influenced the outcome of the war. The Orthanc-stone remained in the custody of the Kings of Gondor in the Fourth Age.
- One Stone was placed at Minas Anor, later renamed Minas Tirith and made the capital of Gondor. It was ultimately used by Steward Denethor to spy on Sauron. Denethor did not become corrupted, but the great effort of will that this required of him led him to age quickly. Furthermore, using the Ithil-stone, Sauron largely controlled what Denethor saw, leading to the latter's despair and insanity. Denethor was holding the stone when he committed suicide on a funeral pyre, and after this, only people of exceeding power could see in it anything other than two flaming hands.
The stones' gaze can pierce anything except darkness and shadow. A technique called shrouding was used when something was to be kept secret from the enemies' eyes. Knowledge of this technique was however lost long ago, although Sauron probably knew of it.