Dwarves in strange moods will create legendary artifacts, unique, "named" items which are of unsurpassable quality (and often value as well). An artifact is the ultimate expression of a dwarf's desires, fears, memories and hopes in art form, and each dwarf will produce at most only one in their lives (or die trying). Dwarves that create an artifact immediately gain enough experience to boost them to legendary level in the affected skill unless they were possessed.
Dwarves drop artifacts in the workshop as soon as they are made. They cannot be traded, but most can be used just like any item of its type. A list of all artifacts that the fortress has created can be seen by pressing .
Artifacts are normally of extremely high value and quality, and can be used just like normal items of their type; they're therefore extremely useful in any situation where value or quality are important. Note that material and weight calculations still apply (so an artifact sword made of cobwebs or an artifact hammer made of glass are not going to be overwhelming powerful); artifact weapons do get a large x3 quality bonus to their weapon accuracy and armor deflection values (compared to x2 to masterwork), but this is not enough to make totally inappropriate materials competitive with steel masterwork equipment. Also note that while they will be half again more accurate, artifact blades do not have a sharper edge than masterwork items of their material.
Artifact furniture of high value can be placed in rooms to give a big increase to the room's value (and hence quality), which can be useful to meet the room quality requirements of nobles. They can also be placed in high traffic areas of the fort, so that dwarves that pass by (or over) them will get happy thoughts from admiring them. Artifact mechanisms can be turned into levers and traps, which count as furniture. Artifact weapons (if not being used in the military) can be put into a weapon trap, which will make it count as valuable furniture. Artifact doors and hatches provide indestructible, instantly lockable gates.
Certain artifact types (barrels, buckets, mechanisms, etc) can be used as components in some buildings; doing so will multiply the artifact's effect on fortress value.
An artifact gem is called a perfect gem and functions the same as a large gem, having all the same uses.
 Other notes
Sometimes dwarves will grow particularly attached to weapons and armor, and if they become attached enough, they will name their armor/weapons. The armor/weapon will then be listed as an artifact. What causes dwarves to name their weapons is unknown - time alone will suffice (though it may take a very long time), but slaying an important historical figure such as a forgotten beast will often be enough.
Artifacts cannot be destroyed by temperature extremesVerify, building destroyers, or fire, although they will ignite and burn as is normal for their material type. They can be lost in pits, carried off the map by flows or thieves, or atom-smashed by bridges. This does not appear to affect the happiness of the artifact's creator.
After creation, an artifact cannot be further decorated (by encrusting it with gems, studding it with metal, or have images sewn into it).
Artifacts disappear from the artifact list upon abandoning a fortress.