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The chasm was known earlier as Cabed-en-Aras (Sindarin; Deer's Leap) because it was narrow enough for a deer to leap across the river from cliff to cliff. It received its new name after Niënor Níniel, having found her husband Túrin Turambar apparently dead and realizing (once the mortally wounded Dragon Glaurung removed her amnesia) that she had married her own brother and was carrying his unborn child, leaped into Cabed Naeramarth, presumably to her death.
Later Túrin returned to Cabed Naeramarth and, realizing what had happened to Niënor and why, he committed suicide at that same place, bringing an end to the curse of the Children of Hurin. The place was considered haunted and cursed thereafter, and even animals avoided it.