The "Night of Tears" is the historic name used to describe the event that occured some time during the late Merethic Era where the ancient Snow Elves attacked and devastated the city of Saarthal, the earliest known Nord settlement in Skyrim.
It is rumored that the Elves besieged Saarthal because they coveted a mysterious artifact of great power uncovered by Saarthal's inhabitants, which would later be known as the Eye of Magnus.
This event had serious repercussions on the relations between the early Elven and human civilizations in Skyrim. Though the ancient Nord king Ysgramor was forced to flee Skyrim following the attack, he eventually returned with the legendary Five Hundred Companions to retaliate and ultimately drive the early Elven civilization from both Skyrim and the island of Solstheim.
This further lead to a major campaign which spread across Tamriel itself, where Skyrim's warriors aided Cyrodiil's human population in overthrowing the ancient Ayleid empire. Their success would mark the end of ancient Elven dominance in Tamriel, gradually leading to the proliferation of humans like the Nords and Imperials.
The Elves driven underground in Skyrim meanwhile would eventually become the dreaded Falmer.