Bilbo Baggins, a remarkably old and eccentric hobbit, throws a spectacular all-day party to celebrate his 111th birthday and his cousin Frodo's 33rd. Although old, Bilbo has the appearance and energy of someone half his age, while Frodo is now legally able to inherit Bilbo's estate. During his after-dinner speech, Bilbo announces that he is leaving, slips on his magic ring, and disappears in front of his guests' astonished eyes. Back in his hobbit hole, Bag End, he meets with his old friend the wizard Gandalf, and they discuss his plan to leave everything — including the ring — to Frodo. Bilbo becomes agitated and suspicious, and he nearly keeps the ring, but he finally leaves it behind. After he commits to the decision, he feels relieved, as though a heavy burden has been lifted.
Frodo, who knew the plan, settles in to live respectably. For seventeen years, little happens except that Frodo does not age, much like his vanished cousin. Travelers' stories of danger beyond the Shire start to arrive, followed soon by Gandalf. He has come to realize that Frodo's ring is, in fact, the One Ring, created long ago by the Dark Lord Sauron. Sauron is unspeakably evil, and he needs to recover the Ring in order to enslave all the peoples of Middle-earth. He has learned from Gollum that the Ring has been found, and he has begun to search for it. Frodo must leave the Shire soon, before Sauron finds him, to keep the Ring safe.
Frodo promises Gandalf that he will leave no later than autumn, and the wizard promises to return to accompany him to Rivendell. To misdirect any pursuit, Frodo pretends to move to the country. Accompanied by Sam Gamgee, his friend and gardener, and his cousin Pippin Took, Frodo sets off walking cross-country. Along the way, they repeatedly encounter one or more frightening strangers: large men wearing black cloaks and riding large black horses, whose presence instills fear in anyone who sees them. Each time, Frodo feels an almost irresistible urge to put on the Ring to hide from them. One of these Black Riders nearly finds them hiding along the roadside, but is scared off by the arrival of a party of elves who give the hobbits shelter for the night.
Dogged by the Black Riders on their trail, the hobbits get Farmer Maggot to smuggle them to the ferry across the Brandywine River. Safe for the moment in his new house at Crickhollow, Frodo breaks the news to his close friends Merry and Pippin that he will be leaving the Shire first thing in the morning. They insist on accompanying him, having long suspected his plans. Hoping to lose the pursuit by avoiding the Road, they set off for the Old Forest, an ancient woodland with a sinister reputation on the border of the Shire.
The hobbits find the Old Forest unsettling. As Merry explains, the trees of the Forest are more alive — or aware — than normal trees. They watch intruders, sometimes dropping branches on them or even grabbing them with roots, and do not like people much. The paths of the Forest are constantly changing, and the hobbits find themselves guided to the heart of the Forest, the valley of the Withywindle. There they find themselves unnaturally sleepy, and they lay down to rest near a giant willow tree. Sam saves Frodo when the tree uses a root to try to drown him, but they are unable to save Merry and Pippin who have been swallowed by cracks in its trunk. When they run calling for help, they find a strange man dressed in blue with yellow boots. He introduces himself as Tom Bombadil, and he breaks frequently into nonsense-singing, but he saves Merry and Pippin from Old Man Willow. As night falls, he leads them to his house on the border of the Old Forest.
