According to the thirteenth-century Saga of Ragnar Lodbrok, Aslaug was the daughter of Sigurd and the shieldmaiden Brynhildr, but was raised by Brynhild's foster father Heimer. At the deaths of Sigurd and Brynhild, Heimer was concerned about Aslaug's security, so he made a harp large enough to hide the girl. He then traveled as a poor harp player carrying the harp containing the girl.
They arrived at Spangereid at Lindesnes in Norway, where they stayed for the night in the house of the peasants Åke and Grima. Åke believed the harp contained valuable items and told his wife Grima. Grima then convinced him to murder Heimer as he was sleeping. However, when they broke the harp open, they discovered a little girl, whom they raised as their own, calling her Kraka ("Crow"). In order to hide her beauty – the accepted sign of her noble origins – they rubbed her in tar and dressed her in a long hood.
However, once as she was bathing, she was discovered by some of the men of Ragnar Lodbrok, the legendary Viking king. Confused by Kraka's beauty, they allowed the bread they were baking to burn, and when Ragnar inquired about this mishap, they told him about the girl. Ragnar then sent for her, but in order to test her wits, he commanded her to arrive neither 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 a dog as a companion. Impressed by her ingenuity and finding her a wise companion, Ragnar proposed marriage to her, which she refused until he had accomplished his mission in Norway. She gave him four sons: Ivar the Boneless, Björn Ironside, Hvitserk, and Ragnvald.
When Ragnar visited viceroy Östen Beli of Sweden, Östen persuaded him to reject Kraka and marry the Swedish princess Ingeborg. On 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 she was the daughter of Sigurd who had slain Fafnir, she said 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 learned of Ragnar's change of mind, he rebelled against him 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 King Ella threw Ragnar into the snake pit, Ragnar 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.