In the Völsunga saga, Sigurd was supposedly the posthumous son of Sigmund and his second wife, Hiordis. Sigmund dies in battle when he attacks Odin (who is in disguise), and Odin shatters Sigmund's sword. Dying, Sigmund tells Hiordis of her pregnancy and bequeaths the fragments of his sword to his unborn son.
Hiordis marries King Alf, and then Alf decides to send Sigurd to Regin as a foster. Regin tempts Sigurd to greed and violence by first asking Sigurd if he has control over Sigmund's gold. When Sigurd says that Alf and his family control the gold and will give him anything he desires, Regin asks Sigurd why he consents to a lowly position at court. Sigurd replies that he is treated as an equal by the kings and can get anything he desires. Then Regin asks Sigurd why he acts as stableboy to the kings and has no horse of his own. Sigurd then goes to get a horse. An old man (Odin in disguise) advises Sigurd on choice of horse, and in this way Sigurd gets Grani, a horse derived from Odin's own Sleipnir.
Finally, Regin tries to tempt Sigurd by telling him the story of the Otter's Gold. Regin's father was Hreidmar, and his two brothers were Ótr and Fafnir. Regin was a natural at smithing, and Ótr was natural at swimming. Ótr used to swim at Andvari's waterfall, where the dwarf Andvari lived. Andvari often assumed the form of a pike and swam in the pool.
One day, the Æsir saw Ótr with a fish on the banks, thought him an otter, and Loki killed him. They took the carcass to the nearby home of Hreidmar to display their catch. Hreidmar, Fafnir, and Regin seized the Æsir and demanded compensation for the death of Ótr. The compensation was to stuff the body with gold and cover the skin with fine treasures. Loki got the net from the sea giantess Rán, caught Andvari (as a pike), and demanded all of the dwarf's gold. Andvari gave the gold, except for a ring. Loki took this ring, too, although it carried a curse of death on its bearer. The Æsir used this gold to stuff Ótr's body with, and covered his skin in gold. They then covered the last exposed place (a whisker) with the ring of Andvari. Afterwards, Fafnir killed Hreidmar and took the gold.
Sigurd agrees to kill Fafnir, who has turned himself into a dragon in order to be better able to guard the gold. Sigurd has Regin make him a sword, which he tests by striking the anvil. The sword shatters, so he has Regin make another. This also shatters. Finally, Sigurd has Regin make a sword out of the fragments that had been left to him by Sigmund. The resulting sword, Gram, cuts through the anvil. To kill Fafnir the dragon, Regin advises him to dig a pit, wait for Fafnir to walk over it, and then stab the dragon. Odin, posing as an old man, advises Sigurd to dig trenches also to drain the blood, and to bathe in it after killing the dragon; bathing in Fafnir's blood confers invulnerability. Sigurd does so and kills Fafnir; Sigurd then bathes in the dragon's blood, which touches all of his body except for one of his shoulders where a leaf was stuck. Regin then asked Sigurd to give him Fafnir's heart for himself. Sigurd drinks some of Fafnir's blood and gains the ability to understand the language of birds. Birds advise him to kill Regin, since Regin is plotting Sigurd's death. Sigurd beheads Regin, roasts Fafnir's heart and consumes part of it. This gives him the gift of "wisdom" (prophecy).
Sigurd met Brynhildr, a "shieldmaiden," after killing Fafnir. She pledges herself to him but also prophesies his doom and marriage to another. (In Völsunga saga, it is not clear that Brynhild is a Valkyrie or in any way supernatural.)
Sigurd went to the court of Heimar, who was married to Bekkhild, sister of Brynhild, and then to the court of Gjúki, where he came to live. Gjuki had three sons and one daughter by his wife, Grimhild. The sons were Gunnar, Hogni and Guttorm, and the daughter was Gudrun. Grimhild made an "Ale of Forgetfulness" to force Sigurd to forget Brynhild, so he could marry Gudrun. Later, Gunnar wanted to court Brynhild. Brynhild's bower was surrounded by flames, and she promised herself only to the man daring enough to go through them. Only Grani, Sigurd's horse, would do it, and only with Sigurd on it. Sigurd exchanged shapes with Gunnar, rode through the flames, and won Brynhild for Gunnar.
Some time later, Brynhild taunted Gudrun for having a better husband, and Gudrun explained all that had passed to Brynhild and explained the deception. For having been deceived and cheated of the husband she had desired, Brynhild plots revenge. First, she refuses to speak to anyone and withdraws. Eventually, Sigurd was sent by Gunnar to see what was wrong, and Brynhild accuses Sigurd of taking liberties with her. Gunnar and Hogni plot Sigurd's death and enchant their brother, Guttorm, to a frenzy to accomplish the deed. Guttorm kills Sigurd in bed, and Brynhild kills Sigurd's three year old son Sigmund (named for Sigurd's father). Brynhild then wills herself to die, and builds a funeral pyre for Sigurd, Sigurd's son, Guttorm (killed by Sigurd) and herself. Sigurd and Brynhild had the daughter Aslaug who married Ragnar Lodbrok.
Sigurd and Gudrun are parents to the twins Sigmund (named after Sigurd's father) and Svanhild.