Aslaug was the daughter of Sigurd and the shieldmaiden Brynhildr, but was raised by Brynhild's fosterfather Heimer. At the death of Sigurd and Brynhild, Heimer was concerned about Aslaug's security, so he made a harp large enough to hide the girl. He then travelled as a poor harpplayer carrying the harp containing the girl.
Once they arrived at Spangereid at Lindesnes in Norway, where they could stay for the night in the house of Åke and Grima. Åke believed that he saw precious items stick out from the harp, which he told his wife Grima. Grima then convinced him of murdering Heimer as he was sleeping. However, when they broke the harp, they discovered a little girl, who they raised as their own, calling her Kraka (Crow). In order to hide her noble origins, they forced the girl always to be dirty and to walk in dirty clothes.
However, once as she was bathing, she was discovered by some of Ragnar Lodbrok's men, who had been sent ashore to bake bread. Confused by Kraka's beauty, they allowed the bread to be burnt, and when Ragnar enquired about this mishap, they told him about the girl. Ragnar then sent for her, but in order to test her wits, he commanded her neither to arrive dressed nor undressed, neither hungry nor full and neither alone nor in company. Kraka arrived dressed in a net, biting an onion and with only the dog as a companion. Impressed, Ragnar married her and she gave him the sons, Ivar the Boneless, Björn Ironside, Hvitserk and Ragnvald.
Once Ragnar visited viceroy Östen Beli of Sweden and Östen convinced Ragnar of marrying the Swedish princess Ingeborg and of rejecting Kraka. At his return home, three birds had already informed Kraka of Ragnar's plans, and so she reproached him and told him of her true noble origins. In order to prove that she was the daughter of Sigurd who had slain Fafnir, she said that she would bear a child whose eye would bear the image of a serpent. This happened and she bore the son Sigurd Snake-in-the-Eye. When Östen learnt of Ragnar's change of mind, he rebelled against Ragnar, but was slain by Ragnar's sons at Kraka's behest.
When Ragnar was about to undertake his fated expedition to England, his failure was due to his not heeding Kraka's warnings about the bad condition of the fleet. When Ragnar had been thrown into the snake pit by king Ella, he was protected by an enchanted shirt that Kraka had made. It was only when this shirt had been removed that the snakes could bite Ragnar and kill him.
By all indications Aslaug was a commoner from the region near Oslo Norway. It is quite possible that the story of her solving Ragnar's riddle has basis in fact. However, with regard to the historicity of her ancestry, her ancestral claims would have been impossible. Her alleged father, Sigurd Fafnersbane, was a historic (although legendary) person who lived at the time of the fall of Rome in 440CE. Based on a study of the Roman records mentioning the various Foederated tribes of Rome, it becomes apparent that it was Ragnar Sigurdsson Ring, himself, and not his commonlaw wife Aslaug who was descended from the legendary hero, Sigurd.