Nerevar was killed during or shortly after the Battle of Red Mountain, under disputed circumstances. He is said to have killed Dumac, the Last Dwemer King. In some versions, he rejoiced in the deed, and feasted on his heart: in others, Dumac and Nerevar had been allied, and the betrayal (by Dumac's minion Kagrenac), which led them into conflict, grieved both Nerevar and Dumac greatly.
In Ashlander texts as well as accounts by the Dissident Priests found in Vivec's temple, however, it is written that Nerevar was not killed in combat, but by his three advisors, Vivec, Almalexia, and Sotha Sil. In this account, Nerevar made them swear to never use the tools, and they obeyed, but secretly conspired to murder Nerevar so that they might gain power. When attempting to summon Azura, Nerevar was foiled; Almalexia used poisoned candles and Sotha Sil used poisoned robes and Vivec used poisoned invocations. Nerevar was killed. In retribution for their betrayal, Azura turned the skin of the Chimer gray, and turned their eyes fiery red. However, the Tribunal (that is, Vivec, Almalexia and Sotha Sil) went on to use the power of the tools and the Heart to become immortal. Afterwards, they set themselves up as the new gods of the Dunmer, claiming superior divinity to the Daedra, whom the Chimer had self-exiled for the worship of. Eventually, their Tribunal Temple took control of all of Morrowind, becoming the monolithic and seemingly infallible entity it was by the end of the Third Era, and leaving only isolated pockets of Ashlanders to maintain the old beliefs.
For their treachery, Azura proclaimed that someday Nerevar would be reincarnated and would make things right again. This led to the persecution of followers of the Nerevarine Cult