The Miasma is a purplish gas, produced by the Skull of Corruption and used by the priests of Vaermina. Any mortal exposed to it will fall into a deep sleep, which slows the aging process and can last for extended periods of time. A long sleep under the Miasma can cause brain damage, and some victims lose their mind entirely.
In the quest Waking Nightmare, the whole of Nightcaller Temple is filled with Miasma, and sleeping enemies within awaken when disturbed. It is eventually learned that Erandur - then known as Brother Casimir - released the gas and fled while the other priests of Vaermina and the Orcish Invaders succumbed to its effects.