Bilbo Baggins is a hobbit who lives a quiet life, until it is upset by a visit from a wizard named Gandalf. He wants Bilbo to help a group of dwarves take back the Mountain from Smaug, a dragon. Bilbo is unsure he wants to help, but he is drawn into the adventure by Gandalf, who tells the dwarves Bilbo is a burglar.

The thirteen dwarves are led by Thorin Oakenshield, whose grandfather left a map and key to the Mountain in the care of Gandalf. The group encounters a few setbacks, such as the loss of the pony carrying their food supplies. Another occurs when Bilbo and the dwarves are captured by trolls, but Gandalf manages, through some trickery to free them.

One night the group is forced to take shelter in a cave during a bad storm. The cave is the home of goblins, who capture them. Gandalf helps them escape, but Bilbo is left behind, after he is knocked unconscious.

He stumbles on a ring in the tunnel and puts it into his pocket. Later his path is blocked by a lake and he meets Gollum, a creature owns the ring and wants to eat Bilbo. Gollum tries to trick Bilbo by cheating, after Bilbo wins a riddle game, by trying to eat him, instead of showing him the way out of the mountain. It is then Bilbo finds out the ring can make him invisible and he uses this power to sneak past Gollum and out of the mountain.

Bilbo returns to the others, but he does not tell them about the ring. As they continue on their quest, they are besieged by a large group of Wargs, wild wolves who are friends of goblins. The party climbs tall trees to escape them, but the goblins arrive and try to set fire to the trees. At last the Lord of the Eagles and his guards arrive and carry them to safety.

They travel next to the home of Beorn, a skin-changer, he can change into a bear. He agrees to help them travel to the gate of Mirkwood, a dangerous forest. The dwarves are told to stay on the path as they travel through Mirkwood. This is also the point where Gandalf leaves the group to go to a meeting.

As they travel the dwarves and Bilbo find they have very little food. After seeing some lights in the forest they decide to leave the path to find food, but instead are captured by giant spiders. The spiders spin them into webs, but Bilbo using his sword frees himself and the others. They realize Thorin is missing and find he has been taken prisoner by the Wood-elves and soon all the dwarves are prisoners.

Bilbo using the ring sneaks into the Wood-elf castle and devices a plan to free the dwarves. He puts the dwarves in wine barrels and throws himself and them through a trap door into the river, which flows to the Lake-town where men live.

The people of Lake-town help the newly freed dwarves and Bilbo reach the Lonely Mountain where Smaug lives. The group finds their way up the Mountain and reach an area where the secret entrance is hiding. They open the entrance and Bilbo, using the ring, sneaks into Smaug's lair stealing a cup from the treasure. Smaug is angry and flies out of the Mountain looking for the dwarves, who hide in the tunnel.

Bilbo goes back to Smaug's home, this time Smaug knows he is there and talks to him. Bilbo angers Smaug, who then flies out to harm the Lake-men, but first he smashes the secret entrance. Luckily the group is safely huddled in the tunnel as Smaug smashes the entrance.

After a while, the group decides to go to Smaug's lair and find he is not there. Thorin wants to find the Arkenstone; he doesn't know Bilbo found it and is keeping it. The party leaves and go to an old out-look post to rest.

Two days before in Lake-town, Smaug is killed by Bard. News soon spreads to the elves, goblins, and Beorn of Smaug's death, so they all want the treasure.

The Wood-elves help the Lake-town people and travel with them to the Mountain, because they think the dwarves are dead and they want the treasure. A raven named Roäc arrives to tell the dwarves what has and is happening. Thorin declares no one will take the treasure, so he has the group barricade themselves inside the Mountain.

Bard and the elves arrive to take the treasure only to be told they cannot have it. Bard tells them he will not allow provisions to be delivered to them inside the Mountain.

Bilbo, tired of waiting for something to happen, delivers the Arkenstone to the Lake-men and elves to use as a bargaining tool against Thorin. Bilbo also sees Gandalf as Bilbo is leaving the camp. The next day Bard and the Elvenking tell Thorin they will exchange the stone for a share of the treasure. Gandalf persuades Thorin to agree to not hurt Bilbo, because he gave the Arkenstone to Bard. Thorin decides to give Bilbo his share of the treasure, which can be divided between the Lake-men and the elves.

Dain, a dwarf, and his men arrive and a battle ensues between them and those camped outside the Mountain. As they fight, the goblins and wild wolves arrive and the Battle of the Five Armies ensues. The Eagles and Beorn help the dwarves, men, and elves win, but Thorin dies.

Afterward, Bilbo and Gandalf return to Bilbo's home and Bilbo is left alone to live his life quietly, just the way he likes it.

The Hobbit is a book full of adventure, but it also has an underlying theme of perseverance and how former foes can work together to defeat a common enemy. It also shows how undertaking different experiences allow people to grow in ways they did not think possible.