A monologue opens the movie that explains the history of the One Ring.  After the prologue, the scene flash forwards to the Shire, 60 years later.  Here, two main characters are introduced, Frodo Baggins, Bilbo’s nephew, and Gandalf the Grey, a wizard.  As it turns out, Gandalf is visiting Bilbo to celebrate his 111^th birthday.  When Bilbo welcomes Gandalf into his home, Gandalf discovers that Bilbo looks unusually young for being eleventy-one, and that he plans on leaving the Shire.  That night at the party, Gandalf provides a stunning fireworks display, and Bilbo shares stories of his travels with the hobbit children.   Three more important hobbits are now introduced:  Samwise (Sam) Gamgee, Meriadoc (Merry) Brandybuck, and Peregrine (Pippin) Took.  After a short speech, Bilbo announces to all of his guests that he will be leaving.  At this, he takes the Ring out of his pocket, and puts it on, instantly vanishing.  Bilbo sneaks away to his house and removes the Ring, being surprised by Gandalf.  After an argument between the two, Bilbo decides to part with the Ring, and leave it, along with the rest of his belongings to Frodo.  When Gandalf tries to pick up the Ring, he has a strange vision of an eye.  When Frodo returns to his new home and finds the Ring on the floor, he also finds Gandalf sitting in the next room.  Gandalf tells Frodo that he must leave, and to hide the Ring.

            Meanwhile, in the tower of Barad-dûr, in Mordor, a shrill voice is heard screaming, ”Shire!  Baggins!”  With that, the nine servants of Sauron leave the tower in search of the Ring.  Meanwhile, Gandalf reads up on the accounts of the Ring that Isildur himself wrote, and discovers that the only way to distinguish it from a regular ring, a trial by fire.  Gandalf then returns to the Shire, and tells Frodo to throw the Ring in the fire.  At first, nothing is seen, but then red markings appear on the band, which appears to be some form of elvish.  Gandalf explains to Frodo that the markings are that of Mordor, and that the Ring he holds once belonged to Sauron, and that he must leave the Shire because the agents of Sauron are seeking it.  After a short silence is broken, they find that they are being eavesdropped by Sam.  So as punishment, Gandalf sends him with Frodo to the village of Bree.  Gandalf warns Frodo that the Ring has a will of its own; it wants to be found.  He rides on to Isengard, the home of his mentor and head of order, Saruman the White.  There, Gandalf learns that Saruman is a traitor, and is held captive.  Back in the Shire, but much farther away from Bag End, Sam and Frodo accidentally run into Merry and Pippin as they are stealing food from a farm.  After a short run, the four topple down a hill onto the road.  A long, piercing shriek is heard a distance away, and they scramble underneath a tree.  Enter the Black Rider, one of the servants of Sauron.  Frodo goes into a trance and begins to put on the Ring, but is stopped by Sam, while Merry throws a rock away from them to distract the Rider, and escape.

            After a few run-ins with more of the Black Riders, the four Hobbits finally reach the Prancing Pony Inn at Bree, where they are supposed to meet Gandalf.  When they learn that Gandalf hadn’t been there for six months, they check in at the downstairs tavern, where Sam tells Frodo that there is someone in the corner who has done nothing but stare at them.  This man is a ranger named Strider, and again, Frodo almost puts on the Ring, when he hears his name.  Frodo trips trying to get away, and accidentally puts on the Ring, vanishing.  Frodo then finds himself in the shadow world, a blurry image of the same place he was.  Unfortunately, his putting on the Ring has attracted the Black Riders, and he sees the Eye of Sauron for the first time.  After removing the Ring, Frodo is grabbed by Strider, and taken into another room, along with the other hobbits.  Here, Strider explains that they are not nearly frightened enough of what is chasing them.  With his quick thinking, Strider takes them to another Inn across the road, to keep them safe from the Riders.  Strider tells the hobbits that the Black Riders were once great kings of Men, the nine who were gifted rings of power from Sauron the deceiver, and became slaves to his will.  The Nâzgul, or Ringwraiths, are neither living nor dead, always feeling the presence of the Ring, always searching for it.  Strider takes the four with him into the wild, on a path to Rivendell, the elven city.

            In Isengard, Saruman is poring over the palantir, conversing with Sauron, who tells him to build an army, so Saruman tears up most of the forest of Isengard to make room for a sub-terrestrial “factory,” as Gandalf wakes up on the roof of the tower of Orthanc.  Returning to Strider and the hobbits, they stop at the watchtower of Amon Sul for the night.  During the night, five of the Ringwraiths attack the hobbits, who are practically defenseless, aside from a few swords, as Strider is out having a look around.  One of the Wraiths senses Frodo, even after he puts on the Ring, and stabs him with a Morgul blade, which poisons Frodo.  After Strider fights the Ringwraiths off, he tends to Frodo, and the company has to double their pace to get Frodo to Rivendell in time.  Back at Isengard, Saruman’s factories are completed.  At the top of the tower, Gandalf waits, and sends a moth for help from the Eagles.  Inside the factories, Saruman’s orcs are forging weapons, and breeding Uruk-Hai, a stronger form of orcs crossed with men.  The scene goes back to Strider and the hobbits.  Strider asks Sam if he knows of the athelas, or kingsfoil plant, as it may help to slow the poison.  When Strider finds some, he is caught by an elf named Arwen, the daughter of Elrond.  She takes Frodo to the Ford of Rivendell, being chased by all nine of the Nâzgul.  At the waters, Arwen chants a spell that causes the river to suddenly flood, drowning the wraiths’ horses, and disabling them until the second installment of the trilogy.

     Frodo then finds himself awake and healed in the house of Elrond, and Gandalf right next to him.  When Frodo asks Gandalf why he never showed up in Bree, Gandalf merely says that he was delayed.  As he says this, Gandalf ponders over his bout with Saruman, and his escape on the back of the King of the Eagles.  Frodo then finds that all of his friends, and even his uncle Bilbo are at Rivendell.  In a conversation between Gandalf and Elrond, Elrond tells Gandalf that the Ring is not safe even in Rivendell.  Gandalf then says that the fate of Middle-Earth must be placed in the hands of Men.  Elrond replies that men are weak, and that they are the reason that the Ring still exists, and that they have no one to unite under.  Gandalf retorts and says that there may be one person capable of that, but he turned to exile by his own will.  That person is Aragorn, also known as Strider.  In the next few scenes, Elrond explains to Gandalf that the peril of the Ring belongs to all the people, and they must decide how to deal with it.  In these scenes, three more crucial characters are introduced: Boromir, the son of the stewards of Gondor; Legolas, the elven prince of Mirkwood; and Gimli, son of Gloin, a dwarf.  The Council of Elrond gathers, a representative of each race there to decide what should be done about the Ring.  After a great argument, Frodo volunteers to take the Ring to Mordor, to Mount Doom, where the Ring was made, and the only place it could be unmade.  Thus, the Fellowship of the Ring was forged, 9 companions:  Boromir, Aragorn, Frodo, Sam, Merry, Pippin, Legolas, Gimli, and Gandalf.  As the Fellowship makes its way towards the Gap of Rohan, they are suddenly sighted by some of Saruman’s birds, the Crebain from Dunland.  They alert Saruman of the Fellowship’s movement, so Gandalf decides to take them over the mountain peak of Caradhras.  On the way to the summit, Legolas hears a fell voice on the air within the blizzard.  Gandalf listens closely, and discerns the voice as belonging to Saruman.  After an avalanche, Gimli says that they should take the path of the Mines of Moria, home to his cousin Balin.  Frodo agrees, and so they head for the Mines.  When the Fellowship enters the Gates of Moria, the Watcher, an octopus-like monster, attacks them.  Once trapped inside the Mines, Gandalf makes use of his magic and produces a light from his staff.  As they explore the shafts, they find that it has long been deserted, and the only remaining inhabitants are the skeletons of dwarves.  When they reach a split in the path that Gandalf has no knowledge of, they sit and wait for a time until Gandalf figures which path is correct.        

            As the Fellowship stumbles upon the Tomb of Balin, a battle ensues.  After fleeing the tomb, and finding themselves surrounded by goblins, the Fellowship then must flee from a Balrog, a demon of shadow and flame from the ancient world.  After a series of stair escapades, finally crossing the Bridge of Kazad-Dun, Gandalf faces off with the Balrog, returning it to the Shadow.  But with a crack of its whip, the Balrog pulls Gandalf down with it.  After fleeing, the Fellowship escapes to the protection of the lady Galadriel in the elvenwood Lorien.  As they are leaving, Saruman is instructing his Uruk-Hais back at the tower of Orthanc to capture the hobbits and bring them back.  The Fellowship is then seen taking a rest on the shore after paddling the great river Anduin.  Then Merry realizes that Frodo and Boromir are gone.  It turns out that Boromir is trying to take the Ring from Frodo.  When Aragorn finds him, he lets Frodo go on to Mordor alone.  After a battle scene, the chief Uruk, Lurtz, kills Boromir, while others capture Merry and Pippin.  Sam sees Frodo trying to paddle away to the other shore, and nearly drowns trying to reach him, telling Frodo that he promised Gandalf he would not leave him.  In the last scene, the remaining three, Aragorn, Gimli, and Legolas, set out to hunt the orcs that have captured the hobbits, as Sam and Frodo climb the Misty Mountains, overlooking Mordor.