During the War of the Ring, Urgost made his lair near an old unnamed set of Dwarven ruins in the Grey Mountains. In the final days during the battles at Minas Tirith, Erebor and Mirkwood, the Black Numenorean, Agandaur, made a deal with Urgost. The two decreed that if Agandaur won the dwarf mountain stronghold of Nordinbad, then Urgost would offer his allegiance to him and his master Sauron. Agandaur left behind some uruk-hai and Men of Carn Dum to await Urgost's answer as he plotted against Nordinbad.
Unbeknownst to Urgost, three heroes Eradan, Andriel, and Farin had swept through the forces Agandaur left behind. As they entered his lair, Urgost slammed down and roared with rage and irritation, believing them to be servants of Agandaur. When he realized they were not, Urgost asked why they were here. When he got his answer, he told them about Agandaur's offer and that he actually had no interest in Nordinbad and had a mind to conquer Carn Dum instead. He was not afraid to fight Agandaur for it, but he knew that he would make an enemy of Sauron if he did. As powerful as he and his dragon kin are, the dark lord would have surely sought to hunt him down if that was the case. Instead he promised to the heroes that he would not join Sauron's forces and remain neutral, if they would turn over Carn Dum to him, since it would be uninhabited after the Black Numenoreans were slain. He then tells the heroes to hurry if they wish to save Nordinbad, for Agandaur is moving against it at that very moment. When they're about to leave Urgost sarcastically says, "Oh yes. By all means, hurry." and backs away laughing.
During the Battle of the Morannon in the South, the three heroes dueled and destroyed Agandaur. With his destruction, Urgost flew out from his lair and soared onward to Carn Dum. He confronted the heroes again, and breathed out his immense flames upon landing. Urgost had sensed that Sauron was destroyed, and that he had been wise not to ally with him. The dragon reminded the heroes of their bargain, and they told him their deal is kept. Urgost then flew off to enjoy his new lair, and the three heroes left Carn Dum astride Beleram, one of the Great Eagles to Rivendell, earning their well-deserved rest.
Urgost, like any fire-drake, is immensely large. His claws are razor-sharp, and he has a crown-like array of horns and spines on his head, which extends down his neck and back. His skin is reddish brown all over with a hint of black, flaming yellow eyes, and a wide jaw with large teeth.
Urgost is very much like Smaug in many respects. Like any dragon in Middle-Earth, Urgost is ferocious, greedy, intelligent, and powerful. Unlike the dragons of Morgoth in the First Age, he has no allegiance to Sauron, Agandaur, or any of the other dark powers. As long as his desire is fulfilled, he also has no intention to cause absurd harm on free folk (this trend could also be said for any other dragons after the banishment of Morgoth, including Smaug).