The daughter of Völsung and the giantess Hljóð, and the twin sister of Sigmundr. She became the reluctant wife of king Siggeir of Gautland, who later had her whole family treacherously murdered, with Sigmundr being the only survivor.

Sigmundr vowed vengeance on Siggeir, and Signý, who hated her husband, was determined to help him. When her oldest son by Siggeir was ten years old, she sent him to Sigmundr to help him avenge the death of Völsung, but Sigmundr deemed the boy unfit for the task ahead. Signý commanded him to kill the boy, which he did. The next winter she sent her second child but he too was unfit and he suffered the same fate as his brother. Convinced that her brother needed a helper of his own race, she exchanged shapes with sorceress. In this new shape she went to her brother in the woods and lay with him for three consecutive nights. She gave birth to a son, whom she named Sinfjötli, and when he was nine years old she sent him to Sigmundr, who believed he was a son of his sister by Siggeir.

When Sinfjötli was full grown, he and his father set the hall on fire in which Siggeir and his men slept. At that time Signý revealed to her brother that Sinfjötli is their son. Because of that and the other terrible things she had done in her quest for vengeance, she deemed herself unfit to live and choose to die in the fire with her husband, although she was not happy to have wed him.