Rudraksha names both a sacred seed and the tree that bears it. In English, it is called the Blue Marble tree, or, less commonly, the Utrasum bead tree. It is known botanically by the names Elaeocarpus sphaericus, E. grandis and E. ganitrus.

All legends of the origin of rudraksha describe them as the tears shed by Lord Siva for the benefit of humanity. "Rudra" stems from the Sanskrit rud or rodana, which means "to cry." It is the original name for Siva as it appears in the Rig Veda. Aksha means "eye," and thus rudraksha beads are deemed the tears of Siva.

Naveen Patnaik briefly tells the tale in The Garden of Life, "Rudra wept when He witnessed the towering metropolis, Tripura, or triple city, created by man's superbly ambitious technology. In its arrogance, this magnificent human creation had undermined the balance between the Earth, atmosphere and sky. Then, according to the Mahabharata, having shed the implacable tear which turned into a rudraksha bead, 'The Lord of the Universe drew his bow and unleashed his arrows at the triple city, burning its demons and hurling them into the western ocean, for the welfare of creation.' " Wearing the rudraksha, devotees remind themselves of God's compassion for the human predicament, His watchful love for us all.

Source : http://www.hinduism-today.com/1997/3/