Karoug is the leader of the Wolfweres on the Isle of Balduran. He's located on the fourth level of the Wandering Eye, standing in the doorway to Balduran's cabin. Following a short dialogue he will transform into a Greater Wolfwere and attack.

Speaking with this lout Karoug has proven ineffective, combat is my only recourse. It seems to be all he understands.

—  Gorion's Ward

As a Greater Wolfwere, Karoug possesses extremely high regeneration and immunities. The Sword of Balduran, the silver dagger, and/or any weapon that provide bonuses against shapeshifter's or regenerating creatures are needed to kill him.

He is also in possession of Maralee's infant child Peladan.