Because of the stories and wealth he brought back from his adventures, Bilbo Baggins is the most famous hobbit in Hobbiton. He is also considered a bit strange, however. The fact that he receives visits at his house, Bag End, from Elves, Dwarves, and the wizard Gandalf make him the object of some slight suspicion. In addition, ever since Bilbo came back to the Shire with the ring—which he has kept secret from nearly everyone—he has not seemed to age at all. In fact, he reaches his 111th birthday virtually unchanged.
When Bilbo announces that he is throwing a grand party for his “eleventy-first” birthday, everyone in the Shire takes interest. After extensive and elaborate preparation, the day of Bilbo’s birthday finally arrives. All of Hobbiton has a fine time eating, drinking, and watching the spectacular fireworks provided by Gandalf.
As dinner winds down, Bilbo rises and asks to speak to the assembled guests. The speech is short. Just as Bilbo is starting to lose his audience’s attention, he announces that he is leaving, and he suddenly disappears in a flash of light. The party guests are not amused, and they return, muttering, to their eating and drinking.
Bilbo, having used his ring to become invisible, walks back to Bag End, takes off the ring and begins packing for a journey. Gandalf arrives at the house shortly thereafter. Bilbo tells the wizard how excited he is to travel again, to see the world outside the Shire. He says that he has felt worn out recently, “like butter that has been scraped over too much bread.” Gandalf reminds Bilbo of the promise he made to leave the magic ring for his favorite cousin, young Frodo Baggins. Frodo is an orphan whom Bilbo has taken under his wing and named as the heir to his home and possessions.
Bilbo, however, is suddenly reluctant to part with the ring, and he even lashes out at Gandalf for pressuring him to keep his promise. Finally, Bilbo gives in, saying that in a way it will be relief to be rid of the ring. Even then, Gandalf has to remind Bilbo one last time to leave the ring behind as Bilbo is on his way out the door. When Bilbo finally takes the ring out of his pocket, he hesitates one last time in handing it over. He drops the ring, and when Gandalf quickly picks it up, Bilbo starts angrily. Bilbo quickly relaxes into a smile, however, and sets off jauntily with his three Dwarf companions.
Frodo arrives back at the house soon after Bilbo leaves. Gandalf tells Frodo that Bilbo has left the ring for him. He warns Frodo not to use the ring and to keep it secret and safe. All the next day, Frodo busily distributes the gifts Bilbo left for various Hobbits, and he deals with all sorts of inquisitive and bothersome visitors. After the gifts have been distributed, Gandalf arrives, seeming troubled, to tell Frodo he is leaving immediately. Gandalf asks Frodo what he knows about the ring, and he warns Frodo again not to use the ring and to keep it a secret.