Bilbo Baggins is a hobbit who lives at Bag-End, Under-Hill, where he has a wonderful home, which is a hole in the ground. It has many rooms and is comfortably furnished, as it was during the life-times of his parents. He has no desire to leave his home and the comfort of his neighborhood, but this all changes the day he is visited by Gandalf.

Gandalf is a wizard, a friend of Bilbo's late grandfather Old Took, and he has determined he will send Bilbo on an adventure, whether Bilbo wants to go or not. Bilbo out of a sense of politeness asks Gandalf to tea the next day. He soon comes to regret his invitation.

Gandalf, before he leaves Bilbo's home, makes a mark on Bilbo's door with his staff. Bilbo, whose memory is not so good, has forgotten the invitation and is only reminded of it, when he hears a knock at his door the next day at tea time.

He answers the door expecting to find Gandalf, but instead he sees a dwarf named Dwalin on his doorstep. Dwalin acts as if he is expected and Bilbo goes along with him, but then more dwarves come to his home for tea. In all, thirteen dwarves show up for tea at Bilbo's home, along with Gandalf. It turns out the mark on the door is an advertisement for work as a burglar and was purposely left there by Gandalf. He tries to convince the dwarves, especially Thorin Oakenshield, a very important dwarf, that Bilbo is the burglar they are looking for to help them break into the Mountain.

The Mountain used to belong to the dwarves, it holds all their treasure, as well as being their home. It was taken from them, through force, by a dragon named Old Smaug. He decided the easiest way to have riches is to take them from dwarves, who had worked long and hard to accumulate them. Now Thorin wants to take back what belongs to him and the other dwarves.

They have a map left in the care of Gandalf by Thorin's late father Thrain. The map shows secret entrances and it comes with a key to help them enter the Mountain.

Bilbo's part in this plan is to be the burglar. He is to actually gain entrance to the Mountain and retrieve the lost treasure. He is not at all sure about this adventure, but his mother's family, the Took, were adventurers so he is intrigued by the prospect of going on an adventure.

The next morning Bilbo wakes up to find his home in disarray, because the dwarves made themselves breakfast and left the dirty dishes for Bilbo to clean. He is upset about the mess and the lack of gratitude on the part of the dwarves. He has just sat down to eat his own breakfast, when he is interrupted by Gandalf. It seems the dwarves did leave Bilbo a note on his mantel piece, it thanked him for his accommodations and accepted his offer to accompany them on their adventure. He is told to meet them at the Green Dragon Inn, Bywater at 11 a.m. Gandalf tells him he needs to hurry to meet them since it is 10:45 and he has only 15 minutes to arrive at the meeting place. Not exactly sure why, but Bilbo hurries out the door without a hat, his handkerchief, and money. He does, though, arrive on time to meet the dwarves and is given a hood and cloak to wear on the journey. Gandalf also arrives to accompany the party on their journey.

It starts out nicely and Bilbo is able to get along with the dwarves and Gandalf well enough. This ends as soon as they enter the Lone-lands, which are dark, have no people, and the roads are in bad shape, which makes travel hard and dwarves grumpy. Then it starts to rain to such a degree that the rivers are swollen and it becomes hazardous to dwarves, hobbits, and ponies. One of the ponies falls into the river, which causes the party to lose most of their food supply. This is a great hardship, because they need the food to sustain them on their journey.

They decide to stop for the night after they crossed the river, but the dwarves are unable to start a fire. This means they cannot cook food or dry their clothes, but a fire is spotted in the woods. So Bilbo is sent to find out who has the fire and obtain food and permission to join the people by the fire. He is told to hoot like an owl if he runs into trouble, but Bilbo has no idea of how to hoot like an owl.

He sneaks up on the fire and finds three trolls sitting around it. They are unhappy, because they have not had human meat to eat in days, instead they are eating mutton. Bilbo decides to try to steal the purse out of one of their pockets and he is caught. He begs for his life and as the trolls decide what to do with him, the dwarves show up to rescue him.

They are caught by the trolls, who want to eat them. Gandalf, by using his voice to trick the trolls into fighting, manages to delay the trolls from acting until the sun comes out. Once the sun hits the trolls it turns them into stone, then the party finds the trolls hideaway and takes their food, gold, and ale. Gandalf warns them all to be more careful from now on during their adventure.

Bilbo Baggins has his quiet life interrupted by a visit from Gandalf. Gandalf wants Bilbo to go on an adventure, but adventures are simply not done by hobbits. Through a bit of trickery Bilbo finds himself on an adventure anyway and he finds he is intrigued by it. He also finds out he has more courage than he thought possible.