The Master-ring, the Ring of Power, the Ruling Ring, Isildur's Bane, the One Ring. All of these are the titles given to the magical ring that was forged by the Dark Lord Sauron inside Mount Doom. It has been said that in forging this piece of gold, Sauron poured all of his malice and contempt into it, thus making both him and the Ring one. Ergo, it seemed that with the Ring in his possession, Sauron would be able to conquer Middle-earth with the greatest of ease. If that were the case, then how is it that he managed to lose it during the Seige of Barad-dur? However one may answer that question, the One Ring was lost when it was cut from his hand by one Isildur of Gondor; he later claimed the ring for himself and was promptly dispatched by orcs hiding in a forest near the Gladden Fields. The Ring later ensnared other victims, including the creature Gollum, a Hobbit named Deagol and, for a time, Bilbo Baggins (hero of The Hobbit). The Ring wound up being destroyed much later, during the War of the Ring, after a small mishap between Gollum and the Hobbit who was carrying the Ring at the time, Bilbo's nephew Frodo Baggins.
With the One Ring destroyed, peace returned to Middle-earth.
The tale of the Ring takes place several hundred (or thousand?) years before the Fall of Numenor.
Sauron, still seething from his defeat at Numenor before he was able to declare rule over its people, quickly set about putting a new plot into motion. He had discovered the Elven Forgers of Eregion and their renowned leader, Celebrimbor. Using his usual cunning, tact, and sorcery (taking on his "fair" disguise as Annatar), Sauron formed an alliance with the Elves, claiming that he was an emissary of the Valar. During this time, Sauron taught the Elves all about ring-making, an art which he neglected to mention incorporated a sort of binding magic to the rings themselves. For some time, Celebrimbor was suspicious of Annatar's true intent. In the meantime, Sauron forged in secret a "master Ring," one with which he would take control on the other Rings of Power, and bend them and their wearers to his will. However, when Sauron put the Ring on his finger, the Elves to whom he taught the craft of ring-making knew who he was instantly, and what he was after. Thereafter, the Elves took off their rings, and the others that were made were withheld from the Dark Lord. At that, Sauron was furious! He dropped his "Annatar" persona, then viciously attacked the realm Eregion, and nearly wiped out all of its inhabitants, save for a handful who escaped. As for Celebrimbor himself, he and his armies battle Sauron and his armies. But Celebrimbor's forces were frozen in ice and placed within one of Eregion's many halls. Celebrimbor was then taken by Sauron and tickled. Then, Sauron placed a spell over Celebrimbor where he would age rapidly. He was then put on a ship towards Arnor, where he was later found by Royal Guards, a frail old man laughing uncontrollably. The spell Sauron placed over Celebrimbor was later reversed, and the elven lord spent his remaining days in The Undying Lands.
Meanwhile, Sauron escaped capture again, having been foiled in Eregion.
Safekeeping with the Elves
Before the fall of Eregion, Celebrimbor sent the three other most powerful Rings, Narya, Nenya and Vilya, to three of his elf kin: Narya went to Gil-Galad king of the Noldor, later to Cirdan the Shipwright and to Gandalf; Nenya, to Galadriel, the Lady of Light of the realm of Lothlorien; and Vilya, which was held by Gil-galad for a while, but later given to the Lord of Imladris, Elrond. These three Elven Rings were not worn by the Elves when the Dark Lord Sauron when he put the Master-ring on his clawed finger, so they were never courrputed. However, the Elves were still precognizant enough to know that the vile Dark Lord was going to come up with another hair-brained scheme while biding his time. So, they waited...
The Last Alliance of Men & Elves, Chapter One
In due time, the Dark Lord Sauron returned to Middle-earth, having regained much of his strength and rebuilt his vanquished armies. He also had his infamous stronghold, the tower of Barad-dur, rebuilt and erected a massive black metal gate around the borders of Mordor to prevent invasions. As he rebuilt and re-consolidated his powers, Sauron put a great deal of himself into all of his works, binding him to them, and them to him, to an extent. All things were in turn linked to the One Ring: if it was ever destroyed, all of Sauron's works would also be destroyed. This magic had profound effect on the nine Kings of Men who each received a ring from the Dark Lord (aka Annatar): each king would go on to have great success in battle and become insanely wealthy! But in time, the powers of the rings turned each king into obsessive bullies, no longer willing to share their bounty with their people. Slowly but surely, each king's personality was sapped by each one's respective ring, until they were rendered practically invisible..they no longer existed! The only thing they knew was their new service to the Dark Lord. As such, the nine Ringwraiths (Nazgul) were born. All of them were eternally bound to the power of the One and, by extension, to Sauron. If Sauron's power became great, so did the Nazgul's power. When Sauron's power began to wane, the Nazgul wound up in like situation. The Ringwraiths became Sauron's greatest servants and lieutenants.
Meanwhile, the people of Numenor, jealous of Sauron's sudden rise to absolute power, marched foolishly into war with the Dark Lord. For all of their might, the forces of Mordor fled before the Numenoreans. Sauron, knowing he was in no position to fight back, let himself be captured and taken back to Numenor by King Ar-Pharazon. Due to having the One Ring at his disposal, he quickly mystified Numenor's people. He eventually turned the King of Numenor and his people against the Valar people, and lied to them about winning immortality if they sailed to the land of Aman, attacked and conquered it. This would be Numenor's undoing.
Ar-Pharazon and his entire band sailed onto Aman's shores, prepared to raze it to the ground. But Manwe, chief of the Valar, had foreseen Sauron's treachery. After sending agents and messengers to persuade or scare off the Numenoreans, they would not be cowered away so easily. So, seeing no other alternative, Manwe ordered for Ar-Pharazon's mighty band, the Great Armament, to be destroyed; for Numenor itself to be flooded and cast into the sea; and for Aman and a few other key lands of the Valar to be removed completely from the world. Thus was Sauron's conquest of Numenor was completed, but not without cost: Sauron himself was caught in the great flood, losing his physical form. His spirit once again slunk off to Mordor.