Around 500 AD, swordsmiths of the Middle East began to produce knives and swords with strength and cutting abilities unequalled by any other civilization of the time. The superiority of these weapons came from the steel that they used to fashion them. The steel was harder and could hold an edge longer than other steels. It is claimed that one of these blades could cleanly slice through a falling silk scarf. Europeans who saw this feat were astounded: their weapons were not capable of anything close to this. The blades of these weapons also had a characteristic wavy pattern. Since the steel was supposed to be initially created in Damascus, the steel became known as "Damascus" steel.
Many people in Europe saw these steels and tried to recreate the effect through processing. However, they could not discover the secret, and could not make it. Though there was a demand for Damascus steel, in the 19th century it stopped being made. This steel had been produced for 11 centuries, and in just about a generation, the means of its manufacture was entirely lost. The reason it disappeared remained a mystery until just a few years ago.
As it turns out, the technique was not lost, it just stopped working. The "secret" that produced such high quality weapons was not in the technique of the swordsmiths, but rather on the composition of the material they were using. The swordsmiths got their steel ingots from India. In the 19th Century, the mining region where those ingots came from changed. These new ingots had slightly different impurities than the prior ingots. Because of the new composition, the new ingots could not be forged into Damascus steel. Because the swordsmiths did not understand the nature of the material they used, when that material changed Damascus steel was lost.
In 1998, J.D. Verhoeven rediscovered the composition that would create this steel. His paper on the topic can be found at the JOM site. It is now again possible to buy items made of true Damascus steel (not pattern welded).