Like all the Great Evils, Mephisto was born from one of the seven heads of Tathamet. His realm in the Burning Hells was the Realm of Hatred, and he watched with joy as its denizens schemed and warred against each other.
As with all of demonkind, Mephisto warred against the High Heavens in the Eternal Conflict. One of these battles bore angels right into the heart of his lair, making an attack against Mephisto himself in order to get the Diablo 2 Items they wanted to hunt for a long time. One of the angels managed to draw blood, causing it to spill onto the ground. This led to the creation of the Magma Demons, who rose up to defend their master and drove the angels back.
Lore of the Demon: D2 Items War
Leading his forces on the battlefields of Pandemonium, Mephisto noticed that the angels were withdrawing. He ordered his forces to withdraw so he could analyze the situation. Baal, losing patience, stormed the Pandemonium Fortress and discovered that the Worldstone was missing. The Eternal Conflict ground to a halt. Eventually, tales of demons summoned into a new realm and a new people reached the ears of the Prime Evils. They sensed within humanity the dormant powers of their nephalem forefathers, and thus resolved to corrupt humanity into a weapon to use against the High Heavens. So it was that Mephisto and his brothers cast their influence into mortal minds, spreading their ideas across Sanctuary.
The Sin War ended with a final battle between the forces of Heaven, Hell, and the Edyrem, after which Mephisto met with the Angiris Council. Mephisto offered to let Sanctuary be untouched by either angel or demon to see what the children may yet become on their own for good or ill.
Diablo 2 Items in the Dark Exile Lore
In the millennia of hunters of D2 Items following the Sin War, the Lesser Evils grew discontent, believing that the Prime Evils had forsaken the Eternal Conflict to focus on humanity. The four Lesser Evils rose up against the Primes, and despite the efforts of Mephisto and his brothers, they were cast out of Hell into the mortal realm, in what would become known as the Dark Exile.