The king of the Frost Giants, Laufey, violated a sacred peace agreement enacted many centuries ago by Odin, leading his people on a grand conquest of the Nine Realms. The first target was Earth, where the Frost Giants invaded Tønsberg, Norway. Using the Casket of Ancient Winters, Laufey murdered hundreds of human villagers, until the Asgardians assembled an army of their best warriors and drove the Frost Giants from Earth.
The Frost Giants returned to Jotunheim, supposedly to replenish their forces, but Odin led a huge force of Asgardian warriors against them. After a long, difficult battle, where Odin personally defeated Laufey while suffering the loss of his right eye, the Asgardians defeated the Jotuns. Odin then granted the Frost Giants mercy and offered a truce between the races, a truce that Laufey was forced to agree to. In the process, Odin confiscated the Casket of Ancient Winters, and as he left Jotunheim, he discovered a baby Jotun who had been abandoned in the conflict by his own father, Laufey. He adopted the baby, and named him Loki.
With the truce in place, peace between Asgard and Jotunheim lasted for over a thousand years. On the day of Thor's ascension to the throne of Asgard, Loki used his powers to sneak several Frost Giants into Odin's Vault to retrieve the Casket of Ancient Winters but were killed by the Destroyer.