Bilbo Baggins
The protagonist Bilbo Baggins is the main focus of the novel. Bilbo’s is a character that appeals to readers as not only the most important but also the most likable and honorable character. When Gandalf enlists Bilbo’s help in Thorin’s quest, Bilbo begins a process of change, transforming from a cautious and lazy bystander during the start of the novel to a brave and confident hero at the end. Even when the other members of his party become corrupted by greed, Bilbo maintains his common sense, courage and honorable nature.
Gandalf the Grey
Gandalf is a wise and powerful wizard and is Bilbo's main source of inspiration during their quest. Gandalf remains aloof throughout the novel and prefers to keep his motives secret, this reminds Bilbo that the world is much larger and more mysterious than he thought. He never reveals, for instance, why he chooses to help Thorin in his quest; he certainly has no interest in the treasure. However Gandalf always has a heightened sense of awareness and always knows more about what is happening than the other characters or even the reader does.
Thorin Oakenshield
Although Thorin is not the protagonist, he is still one of the chief characters in the novel second only to Bilbo. Thorin is the leader of the dwarves and is on a quest to reclaim their home and retake his grandfather's throne. Thorin is in many ways a stereotypical dwarf: brave, stubborn, proud, greedy for gold and his leadership of the dwarves is unchallenged because they believe him to be the rightful King Under the Mountain. Once Thorin gets his hands on Smaug’s treasure, he becomes irrationally greedy and obsessed with wealth; the Arkenstone in particular which is similar to Gollum's obsession with the ring. Thorin believes he is the king and therefore the treasure belongs to him; this leads to conflict with the Lake-men and Wood-elves when he refuses to share the treasure with them and results in the Battle of the Five Armies.
Supporting Characters
The Dwarves
The dwarves Fili, Kili, Oin, Gloin, Dwalin, Balin, Bifur, Bofur, Bombur, Dori, Nori and Ori are not developed as in depth as the main characters but still play an important role. Throughout the novel they remain very silent except for Balin who is the oldest of the party and the main source of dwarven history in the novel.
Smaug
Despite being presented as the novel's antagonist, Smaug's appearance in the novel is rare. Smaug is the one who destroyed the dwarven kingdom of Erebor under the Lonely Mountain and has spent decades sleeping on a mound of dwarven gold. The fact that Smaug is slain two chapters after he is introduced shows that he does not play as big a role as most readers would believe at the start of the novel.