The Were-worms, that is true Were-worms, were formidable monsters. Wingless, they were relatives of Dragons, and yet were long, slender and wingless, and usually had reddish brown or green hides. Like Cold-drakes, they were powerful spell-casters; notably, Were-worms concentrated on their abilities as shape-changers, with which they could elude, bewilder, surprise, terrify, or simply overwhelm their foes. A Were-worm could reduce or increase its size by as much as fifty percent of its mass and alter it’s physical features to an uncanny degree, assuming any form it could actually see (or envision in detail) at the time it altered its shape.
The only known Were-worms lived in the highlands of the Farthest east. Their greatest concentration was in the Mountains of the Wind (Q. "Orosúli"; S. "Ered Gwaen") in southeastern Endor, where they received worship from the local proto-Womaw, but a few lived in the Red Mountains (Q. "Orocarni"; S. "Ered Ceren") to the north, where they were more solitary and aggressive. They favored mist-shrouded lairs, which might account for the legends of Were-worms living in the clouds.
A company of unrelated creatures described as “Were-worms” appeared in Rhovanion in the late Third Age, chiefly in the host of Bolg of the Gundabad Orcs in some records of the Battle of Five Armies. These creatures were enigmatic in nature, seeming to be titanic, burrowing invertebrates with great mandibles and grey, thick hide. The origin of these creatures is debatable; it is possible they were Nameless Things from the Grey Mountains, or perhaps creations of the Necromancer of Dol Guldur.
In early drafts of the Hobbit Tolkien speaks more thoroughly of "the Were-worms of the East of East" and the "Desert Gobi.” While it has sometimes been suggested that "Were" must refer to were-creatures, monstrous creatures such as Werewolves, the term seems to be a Tolkienian play on words related to Click beetle worms and possibly silkworms. As the Last Desert seems to be the Middle-Earth equivalent to the Gobi desert, some commentators also have suggested that the Wereworms of the Last Desert may be an allusion to the Mongolian Death Worm.