In a world known as Middle Earth, a number of powerful rings were assigned to various beings thousands of years ago, with the dark lord Sauron forging one to control others and all life. When he was defeated by an alliance of men and elves, the ring passed on from one being to another over the passage of time, with all being influenced by its undeniable power.
The latest to possess it, Bilbo Baggins (IAN HOLM), a 111-year old hobbit, is reluctant to part with it as it's kept him perpetually young. Nevertheless, his old friend, Gandalf (IAN McKELLEN), a powerful but wise wizard, convinces him to pass it down it to his young heir, Frodo Baggins (ELIJAH WOOD), who's unaware of its background or potential for personal upheaval.
Familiar with the ring's power, its desire to rule, and its need to return to its original master, Gandalf realizes that Frodo's possession of it puts him in danger and thus tells him he must leave for his own good. Accompanied by his friends and fellow hobbits, Sam (SEAN ASTIN), Pippin (BILLY BOYD) and
Merry (DOMINIC MONAGHAN), Frodo does just that, while Gandalf goes to visit Saruman (CHRISTOPHER LEE), another wizard.
It turns out Saruman's been corrupted by Sauron who's now been resurrected, and so Frodo and his friends find themselves on their own, pursued by evil beings on horseback intent on seizing the ring. It turns out, however, that they have friends in unlikely places as they meet Aragorn (VIGGO MORTENSEN), a human ranger, and Arwen (LIV TYLER), a beautiful elf, who collectively try to keep the hobbits out of harm's way.
Frodo is finally wounded, but is then saved and eventually reunited with Gandalf. They then attend a meeting where various beings -- Boromir (SEAN BEAN), a human, Legolas (ORLANDO BLOOM), an elf bowman, and Gimli (JOHN RHYS-DAVIES), a gruff dwarf - agree that the ring Frodo possesses must be destroyed. The problem is that the only way that can occur is by returning it to the fires of Mount Doom where it was forged.
From that point on, those various beings - the Fellowship of the Ring - set out across the lands on their mission and encounter others - such as the mystical Galadriel (CATE BLANCHETT) - along with all sorts of monstrous creatures who either want to harm them or gain possession of the ring.