Book I Chapter 1: "A Long-Expected Party"
Bilbo Baggins plans a magnificent party to celebrate his hundred and eleventh ("eleventy-first") birthday. Bilbo shares his birthday and his home, Bag End, with his nephew Frodo. As the party draws near, the wizard Gandalf arrives at Bag End, not only to provide his famous fireworks for the celebration, but also to inquire about Bilbo's plans after the party. Bilbo tells Gandalf he will be leaving Bag End and the Shire, the home country of Hobbits. Bilbo announces his plan to his party guests in dramatic fashion: he makes a farewell speech to his fellow Hobbits, at the end of which he abruptly vanishes from sight.

Leaving his guests to wonder about his disappearance, Bilbo returns to Bag End, where he finds Gandalf waiting for him. Bilbo had used the magic ring he acquired during his adventure with the Dwarves (related in The Hobbit and retold in the Prologue) in order to vanish. He is reluctant to leave the ring behind, as he had planned; however, Gandalf presses him to do so. Placing the ring on the mantelpiece for Frodo, Bilbo departs. Gandalf warns Frodo to use the ring seldom, if at all, before he, too, leaves, not to return for some time.