The Hobbit is selected by the wizard Gandalf to help Thorin and his party of Dwarves reclaim their ancestral home and treasure, which has been seized by the dragon Smaug.

Bilbo's way of life in the Shire, defined by features like the availability of tobacco and postal service, recalls that of the English middle class during the Victorian to Edwardian eras.

[T 1] The adventure takes Bilbo and his companions through the wilderness,[T 2] to the elves haven, Rivendell,[T 3] across the Misty Mountains where, escaping from goblins,[T 4] he meets Gollum and acquires a magic ring.

[T 5] His journey continues via a lucky escape from wargs, goblins, and fire,[T 6] to the house of Beorn the shapeshifter,[T 7] through the black forest of Mirkwood,[T 8] to Lake-town in the middle of Long Lake,[T 9] and eventually to the Mountain itself.

[T 18][T 19] Two years later Bilbo accompanies Gandalf, Elrond, Galadriel, and Frodo to the Grey Havens, there to board ship bound for Tol Eressëa across the sea.

[T 20] In Tolkien's narrative conceit, in which all the writings of Middle-earth are translations from the fictitious volume of the Red Book of Westmarch, Bilbo is the author of The Hobbit, translator of various "works from the elvish",[T 21] and the author of the following poems and songs: The philologist and Tolkien scholar Tom Shippey notes that "Baggins" is close to the spoken words bæggin, bægginz in the dialect of Huddersfield, Yorkshire.

[5] Tolkien worked in Yorkshire early in his career, at the University of Leeds; from 1920 he was a reader in the school of English studies, and he rose to become a full professor there.

[4] Shippey observes that the socially aspiring Sackville-Bagginses have similarly attempted to "Frenchify" their family name, Sac[k]-ville = "Bag Town", as a mark of their bourgeois status.

[10] Bilbo's distinctly anachronistic period, compared to the characters he meets, can be defined, Shippey notes, by the presence of tobacco, brought to Europe in 1559, and a postal service, introduced in England in 1840.

[4][c] Like Tolkien himself, Bilbo was "English, middle class; and roughly Victorian to Edwardian", something that as Shippey observes, does not belong to the much older world of elves, dwarves, and wizards.

[4] Marjorie Burns, a medievalist, writes that Bilbo's character and adventures match the fantasy writer and designer William Morris's account of his travels in Iceland in the early 1870s in numerous details.

He meets a "boisterous" man called "Biorn the boaster" who lives in a hall beside Eyja-fell, and who tells Morris, tapping him on the belly, "... besides, you know you are so fat", just as Beorn pokes Bilbo "most disrespectfully" and compares him to a plump rabbit.

Burns suggests that these images "make excellent models" for the Bilbo who runs puffing to the Green Dragon inn or "jogs along behind Gandalf and the dwarves" on his quest.

[11] The Christian writer Joseph Pearce describes The Hobbit as "a pilgrimage of grace, in which its protagonist, Bilbo Baggins, becomes grown up ... in wisdom and virtue".

[12] Dorothy Matthews sees the story rather as a psychological journey, the anti-heroic Bilbo being willing to face challenges while firmly continuing to love home and discovering himself.

[15] Accordingly, Tolkien's decision to include the Baggins and other hobbit family trees in Lord of the Rings[T 25] gives the book, in Fisher's view, a strongly "hobbitish perspective".

[15] Fisher observes that Bilbo is, like Aragorn: a "distillation of the best of two families"; he notes that in the game The Quest of Erebor, Gandalf is given the (non-Tolkien) lines "So naturally, thinking over the hobbits that I knew, I said to myself, 'I want a dash of the [adventurous] Took ... and I want a good foundation of the stolider sort, a Baggins perhaps.'

[19] The 1969 parody Bored of the Rings[20] by "Harvard Lampoon" (i.e. its co-founders Douglas Kenney and Henry Beard) modifies the hobbit's name to "Dildo Bugger".

[22] The 1976 Russian translation of The Hobbit was illustrated with drawings by Mikhail Belomlinsky; he based his Bilbo character on the actor Yevgeny Leonov, who he described as "good-natured, plump, with hairy legs".