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It is presumed that ゑ represented [we] (listen). It is thought that, after ゑ and え came to denote the same pronunciation as イェ [je] (listen) in the Kamakura period, they came to be pronounced as the modern エ [e]; there is also the view that the pronunciation difference between the two kana remained until the Taishō period.
Along with the kana for wi (ゐ in hiragana, ヰ in katakana), this kana became obsolete in 1946 for Japanese, and is now rare in everyday usage; in onomatopoeia or foreign words, the katakana form ウェ (we) is preferred (as, ウェスト for "west"). One modern-day usage of this kana is in the name of the beer Yebisu, which is actually pronounced "Ebisu", and is occasionally written "ヱビス" or "ゑびす". Katakana ヱ is sometimes written with a dakuten, ヹ, to represent a /ve/ sound in foreign words; however, most IMEs lack a convenient way to write this. The combination ヴェ is far more commonly used.
Hiragana ゑ is still used in several Okinawan orthographies for the syllable /we/. In the Ryukyu University system, ゑ is also combined with a small ぃ, ゑぃ/ヱィ, to represent the sound /wi/. Katakana ヱ is used in Ainu for /we/.