The novel opens as Bilbo Baggins is enjoying his pipe after a fine breakfast. Pipe smoking is one of Bilbo's favourite pleasures and he feels quite content. He is middle-aged, has a clean, warm burrow in the ground, and has few, if any, worries. He has lived most of his life in this splendid burrow that his farther tunnelled years ago, and he has never ventured further that his own community. Thus, he is caught off-guard when Gandalf, a wizard, stops by for a chat and says he is looking for a companion for an adventure. Bilbo is reluctant but invites him for tea the next day. Next day, Bilbo's doorbell jangles frantically and Bilbo remembers only inviting Gandalf, instead there were Dwarfs piling onto his doorstep. When Thorin, the son of dwarf king, begins to outline the dwarves quest, he seems to include Bilbo as one of the participants. Bilbo cries out and shakes with fear as he listens to Thorin talk of possible dangers. Eventually he decides to join the Thorin and Company. Gandalf reveals a key and a map of their journey, ending in the Lonely Mountain where lies the treasure of Thorin's ancestors, guarded by Smaug, an immense dragon. The plan is quite simple: go to the mountain, destroy the dragon, and reclaim their treasure. An early morning start is agreed but when Bilbo wakes up in the late morning, he is disappointed to see that the dwarfs have left. He is surprised when Gandalf walks in and tells him that the Company is waiting for him at the Green Dragon Inn. Bilbo hurries down the road realising already what he has forgotten like his handkerchief and walking-stick. The Company mounts upon their ponies and take off for their adventure. They pass through hobbit lands, places where people speak strangely and, eventually, Bilbo discovers that they are now far in the Lone-lands. Rain begins to fall, but the Company continues, and when it is nearly dark, Bilbo notices that Gandalf is not with them. When the rain begins to pour, the dwarfs stop and send Bilbo to investigate a light not to far away. Bilbo finds three trolls grumbling about the mutton they are roasting, but they prefer manflesh. Bilbo decides against talking to the trolls, but remembers that the dwarfs think he is a burglar and that he should bring back proof. His decision to pick William's pocket is foolhardy, the trolls capture him, then quarrel over his 'mouthful.' The dwarfs approach and are quickly captured, all except for Thorin. Bilbo escapes, and he and Thorin use fire logs and sparks to drive the trolls away, but fail. Gandalf returns and through a bit of ventriloquism induces the trolls to argue too long about how to prepare the dwarfs for eating. They argue too long, though, and, at dawn, are turned to stone. Once the Company has been released, they decide to bed down for the night, but do not before taking two swords and a knife from the trolls' loot. Next afternoon, they find a path and set out towards the East. Gandalf tells Bilbo that he went ahead yesterday, heard of the trolls, and returned none too soon. He warns the dwarfs to be more careful in future. Their next stop will be Rivendell, where a friend named Elrond lives They find the secret valley and, as they begin their descent, they hear elf songs. They stop only briefly and come at last to Elrond's Last Homely House. They are greeted and entertained by their host, and then Elrond deciphers some mysterious runes on their map. These runes are moon runes and are used in a special way. He translates the message and tells them that the only way to enter the Lonely Mountain is to use the key that Thorin possessing and, 'when the thrush knocks,' the setting sun will shine upon the keyhole. The next morning the Company rides away amid songs of farewell, heading for the Misty Mountains and lands beyond. Soon a storm causes them to stop, and they have bed down in a small, dry cave for the night. But they have chosen the wrong cave and are soon surrounded by Orcs ( goblins ) who are armed and hungry for victims. Down in the goblin tunnels, however, Gandalf uses both wand and sword and kills the Great Goblin and frees his friends. Confused, the dwarves scurry toward what the hope is the way out of the tunnels, but along the way Bilbo is knocked unconscious and is accidentally left behind. When Bilbo wakes, he finds himself alone. As he gropes his way along the tunnel in an attempt to find his companions, he puts his hand on a small, cold ring of metal, which he pockets without thinking much about it. Certainly he has no notion that his own life and all of Middle-earth will be affected by this act. After a time, Bilbo is alarmed as he steps into a cold cavern pool, along the edge of which he meets the mysterious Gollum, 'a small slimy creature'. The murderous Gollum is daunted by the sword which Bilbo carries, so he settles for a game of riddles instead of a direct attack. The rather uneven stakes are the life of Bilbo against Gollum's revealing the way out of the tunnel. By a mixture of good memory and apparent luck, Bilbo wins the riddle game, only to find Gollum unwilling to carry out his part of the bargain until he finds his 'precious', a ring of power which renders its wearer invisible. By means of it, Gollum expects to strangle Bilbo. When Gollum discovers that the precious ring is missing, he leaps towards Bilbo, who feels the ring in his pocket, finds it slipping onto his finger, and he disappears from Gollum's sight as the enraged creature rushes right past him. Bilbo wisely follows Gollum along the passages until he finds his enemy crouched in the opening which leads to the outside world. In a gesture of pity for the wretched Gollum, Bilbo leaps over him instead of striking out his sword. In a short time Bilbo is reunited with his dwarf friends outside, who are amazed at his escape. But Bilbo dies not yet tell them about his magic ring. Escape from the goblins is not yet complete, however, as Gandalf and the dwarves are chased up the trees by evil wolves called Wargs and are kept helpless until the goblins arrive. Gandalf tries to drive the animals away with flaming pine cones, but in the doing so he sets the trees afire. It seems for a time that the Company might be roasted, but they are seen by the King of the Eagels, who leads his followers in an aerial rescue. After a night of rest in the eagles' eyrie, the Company is delivered by air to a great rock east of the Misty Mountains and near to the forest Mirkwood. Nearby they are granted somewhat reluctant hospitality by Beorn, a man who becomes, on occasion, a bear, for he is a skin-changer. Beorn is reconciled to being host of such a numerous and mixed group when Gandalf tells him of their fight with the goblins and the death of the Great Goblin. In the late-night rendezvous as a bear with many other bears, Beorn confirms Gandalfs' story and is pleased to outfit the Company for the next stage of their journey: Mirkwood Forest. In addition he warns them seriously that, however unpleasant the journey, they must not wander off the path. The journey seems even more frightening to Bilbo that the others when Gandalf announces that they must go through the forest without him. Their fears are confirmed in a series of misadventures. First, they attempt to cross a swift, black-looking river by snagging a boat from the opposite riverbank. In the process Bombur falls into the water and into an unnatural sleep from which they cannot wake him. Next the hungry travellers are lured off the path by three separate visions of elves feasting in the forest some distance away. Each time as the dwarves reveal themselves to the feasters, the scene disappears. On the third occasion Bilbo is separated from the dwarves. After a short rest against a tree trunk, Bilbo discovers that he has been tied down by a giant spider. Cutting himself loose just in time, Bilbo attacks the spider with his sword and kills it. The horror of fight causes Bilbo to pass out for a few moments, but when he recovers he feels a surge of pride. He celebrates his victory by naming his sward, Sting. The hobbit goes in search of his friends and finds them tied up in bundles by spiders, who are eyeing them hungrily. Through clever strategy and use of his magic ring, Bilbo rescues the dwarves, though in the process he must reveal the existence of the ring. Far from thinking less of him, the dwarves are pleased to have a member of their company with someone who is blessed with cleverness and luck, not to mention a magic token. Their pleasure is short-lived, however, as they discover that Thorin is missing. Thorin has been captured by a band of Wood-elves, who try unsuccessfully to learn from him what he and his friends were doing in the woods. The rest of the dwarves are quickly captured and taken to the dungeons of the Wood-elves, where they are helpless but not mistreated. Only Bilbo slipped the ring on as the capture took place. He continues to show courage and ingenuity as he manages during the following days to scout out the dungeon and devise a scheme for freeing the dwarves and sending them downstream in supposedly empty barrels. The destination of the barrels is Lake-town. Thus Bilbo and the dwarves arrive at this important stage of their journey in the only way possible. The path that Gandalf and Beorn warned them never to leave had become unsafe in recent times, and only the river though the elf kingdom could have brought them to their destination. Once among the citizens of Lake-town, Thorin declares himself to be the grandson of the King under the Mountain, and at the prospect of a new king, however bedraggled and presently disposed of his kingdom, excites the people. They begin to remember old songs about the rivers running with gold when the mountain king would return. They are at least persuaded enough of the possibility of Thorin's claim to outfit the Company for their assault on the Lonely Mountain, where Smaug rules alone. Once on the Lonely Mountain, the invaders search for the secret entrance far away from Smaug's own front door. The sound of a thrush breaking a snail open on the rock caused the Company to follow the directions of Elrond's translation of the runes. The dwarves take the occasion to remind Bilbo that his duty as burglar is about to commence. It is said that Bilbo did the bravest act of his life by entering the tunnel alone. But he does it and finds at the bottom a great treasure of gold and jewels, with Smaug sound asleep on top of it all. Bilbo lifts from the pile a great two-handled cup and flees back to the dwarves. When Smaug awakens, he misses even this small part of his treasure and goes on a fiery, furious search for the thief, the dwarves narrowly escape by slipping inside of the tunnel themselves. Finally Bilbo puts on the ring and goes down to comfort the calmer but still angry dragon. There ensures another riddle game, but this time composed of enigmatic references to Bilbo's own identity and adventures. Smaug is sufficiently interested to continue the conversation with the invisible Bilbo during which the dragon unwittingly reveals under his breast a spot which is not protected by the iron scales that cover the rest of his body. Bilbo barely escapes back into the tunnel and up into the open air, where he tells his friends his new discovery. For then Smaug suddenly erupts again and storms across the mountainside sealing the dwarves inside the tunnel. Smaug continues to fly to Lake-town to destroy the inhabitants whom he suspects of having aided the unseen enemy. Bilbo once again explores the cavers below and this time he discovers and pockets the most magnificent treasure of all, the great jewel called the Arkenstone. When the dwarves descend and begin searching through the treasure, Bilbo says nothing about his find. Meanwhile Smaug attacks Lake-town, seeking to destroy all of its people. At a critical moment, a brave captain of archers named Bard is told by a thrush of the one place where Smaug is vulnerable, and Bard shoots his last arrow into the spot and Smaug falls dying into the lake. Bard becomes a real hero, though the Master of Lake-town tries to prevent this. At the Lonely mountain, the dwarves and Bilbo are relived to learn from an ancient raven that Smaug is dead. But they also learn that men and elves are gathering to seek the gold and jewels which he no longer protects. Thorin asks the raven to alert Dain and others of Thorin's kin to come and help guard the treasure. Then he and the rest of the Company barricade the entrance to the cavern with a hastily constructed stone wall. When the elf king and Bard seek to negotiate with Thorin on behalf of the men and elves, Thorin rejects them fiercely and seems bent on war. In a desperate attempt to prevent fighting, Bilbo sneaks into the 'enemy' camp and delivers the precious Arkenstone to Bard and the elf king so that they will have something of a sufficient value to persuade Thorin to relent. Suddenly Bilbo discovers that Gandalf is among the men and elves, happily reaffirming his own prophecy that there is more to Bilbo Baggins than anyone thought. Bilbo chooses to turn reluctantly but dutifully to his place amoung the dwarves. But when Bard reveals to Thorin that he has the Arkenstone, Thorin nearly hurls Bilbo over the barricade. Finally in bitterness he offers Bilbo's own share of the treasure of Smaug in return for the Arkenstone, and both sides retire for the time being, with Bilbo banished from the dwarves' company. Suddenly the alignments change radically as dwarves, men and elves are attacked by hordes of Orcs and Wargs. The Battle of Five Armies has begun. In the midst of the battle, Thorin leads his dwarfs out of their stronghold in a glorious and futile gesture of defiance. Just as all seems lost, Bilbo looks up and cries out that eagles are coming. He himself is knocked unconscious by a stone and does not regain to his senses until the battle is over. Then he is taken to bid farewell to Thorin Oakenshield, who is dying from his wounds but wishes to be reconciled with Bilbo. Bilbo returns to his home in the Shire with a small chest of gold and one in silver, plus the gold that he and Gandalf recovers from the trolls' loot. Gandalf's warning that Bilbo might need more riches than he expected turns out to be true as Bilbo returns to the Shire just in time to find that his home appropriated and his furniture being auctioned. All is set right in time, however, and Bilbo settles down among his friends and kin, through marked forever a bit odd. He spends much time writing his memoirs. A few years later he is surprised by a visit from Gandalf and an obviously prosperous Balin and is bought up to date on the fortunes of the dwarves and the people of Lake-town and the rebuilt city of Dale. The story ends with the suggestion by Gandalf that something more that sheer luck lay behind the adventures and with an expression of satisfied recognition by Bilbo that he is ''only quite a little fellow in the world after all"