Many members of the Cormyrn royal court had been clamoring for war with Denerim since before Prince Lyrion's disappearance, since Cormyr had lent a great deal of money to Denerim in order to rebuild after the Shardmind invasion and had yet to pay it back. Many of them, too, were young firebrands who did not have a chance to prove themselves in the Shardmind invasion, and so were eager to gain glory in combat. Once the Prince disappeared, however, the warhawks gained the support of King Cormyrn, and an army was raised.
King Delphinius of Denerim knew there was a chance of war— however, he hoped that a diplomatic solution could be found first. Thus, while he mustered his bannermen for battle, he refused to mobilize any forces along the Denerim-Cormyr border, not wanting to escalate tensions further.
Because of this, Denerim was caught almost entirely unawares when King Cormyrn forced a march through the Thunder Peaks, straight to the capital city, Highmoon. King Delphinius met the Cormyrn host head-on, hoping to avoid the suffering and destruction caused by a prolonged siege. Though the Cormyrns were not expecting to be met in open battle so quickly, they still outnumbered King Delphinius' forces by nearly a thousand men, and following a brief but bloody battle, King Delphinius and the remainder of his men were forced back behind the city walls.
For three weeks, then, the Cormyrn army bombarded the city with all manner of things— stones, flaming pots of oil, the corpses of cattle— until finally it became clear that reinforcements would not come for King Delphinius— Cormyrn galleys had sailed up the Archenbridge river and taken the only crossing, cutting Highmoon off from reinforcements from Urmlaspyr. King Delphinius surrendered the city to Cormyr, under the condition that it would not be sacked. He and most of the other senior nobility of the city were taken prisoner, and the Cormyrn's raised their banners above the Old Palace.
Many buildings in Highmoon were destroyed during the siege, either by fire or stone, including the Grand Halen Embassy. Much of its population has fled to escape abuses by the occupying army and the plague caused by the numerous corpses littering the streets.