When the core of an interstellar molecular cloud of hydrogen becomes gravitationally unstable, it collapses, gaining in density, and pulling more material inwards. If the cloud is large enough, it forms a large star many many times the size of our sun.
Much like gas-guzzling SUVs, large stars run out of fuel quickly (in a cosmic sense). When all the hydrogen is burnt up and fused to helium, they collapse inwards. Their density and temperature increases, and, desperate for fuel, they burn helium to form higher and higher elements, resulting in a further increase in density and temperature, till they explode into supernovae.
Supernovae are the only known sources for elements higher than oxygen in the universe. That includes almost everything you see around you. You, I, this chair, this computer - we are all made up of the same stuff that stars were once made of.
We are stardust, billion year old carbon, indeed.
ps: Been on a Joni Mitchell trip, arising out of Falstaff's comment on the previous post.