Bilbo Baggins awakes late the next morning to find that the dwarves are gone. Gandalf appears and shows him a note the dwarves left, agreeing to give him one-fourteenth of the profits if he accompanies them to reclaim their treasure. Bilbo runs to meet the dwarves, forgetting his handkerchief.

Bilbo and the dwarves set off on ponies loaded with provisions; Gandalf soon joins them. They ride first through friendly hobbit-lands, but the journey becomes unpleasant by the end of May, as they ride far into the uninhabited Lone-lands. Riding in the rain, Bilbo wishes he were back at home. Gandalf disappears, and one of their loaded ponies runs away, leaving them with little food.

The hungry group is trying to make camp in the wet forest when they see a light and send Bilbo to investigate. He finds three trolls — Bert, Tom, and William — around a fire, roasting mutton and complaining of having no men to eat. Bilbo, trying to act like a burglar, is caught trying to pick William's pocket. The trolls disagree about what to do with Bilbo and are fighting among themselves when Balin enters their camp. They capture him and put him into a sack, and then do the same to the rest of the dwarves who come looking for Bilbo. Bilbo hides in the top of a bush.

Gandalf returns and tricks the trolls into staying out past dawn and they turn to stone, because trolls must be underground during the day. Gandalf and Bilbo free the dwarves. They find the trolls' secret cave and help themselves to food, clothes, swords, and gold coins, and then they go to sleep.

The next morning, they load their ponies. They bury the gold for safekeeping and continue to travel east. Gandalf tells Thorin that he had been scouting ahead when he heard in Rivendell that trolls were in the area and he knew he was wanted back. He warns Thorin to take care.