- "In a hole in the ground there lived a Hobbit. Not a nasty, dirty, wet hole, filled with the ends of worms and an oozy smell, nor yet a dry, bare, sandy hole with nothing in it to sit down on or to eat: it was a Hobbit-hole, and that means comfort."
- —The Hobbit, "An Unexpected Party"
Bilbo Baggins inherited the home from his parents, Bungo and Belladonna (Took) Baggins. It was Bungo who built the smial for Belladonna in TA 2889. The hobbit hole is noted to have a green door with a round brass knob, all but countless rooms with round windows, and a garden. Although hobbits are known to be of small stature, larger visitors are often seen, indicating that the ceilings are certainly taller than expected. The grounds and home were kept by the Gamgee family, most notably Hamfast ("The Gaffer") and later his son, Samwise.
The beautiful hole was a point of contention between Bilbo and his relatives the Sackville-Bagginses, who very much desired to own it. Here, Bilbo lived a quiet existence until the wizard Gandalf appeared with 13 dwarves at the beginning of The Hobbit and Bilbo went off on his adventure. Upon his return he discovered the contents of the smial being auctioned off, since he had gone missing and was assumed to have died. The Sackville-Bagginses were disappointed at his return and their loss of Bag End.
By the beginning of The Lord of the Rings, Bilbo adopted his cousin (and nephew) Frodo as his heir. Frodo became the Master of Bag End on their mutual birthday, when Frodo turned 33 and Bilbo turned 111 years old. Bilbo left to live with the elves at Rivendell. Frodo remained content at Bag End until Gandalf returned and confirmed that Bilbo's ring was actually the One Ring. Preparations for departure ensued, with Frodo selling Bag End to the Sackville-Bagginses and moving to Crickhollow before departing on the Quest of the Ring.
Upon their return, during the Scouring of the Shire, Frodo and company discovered that Lotho Sackville-Baggins had made Bag End his power base as he became Chief of the Shire. He succeeded only too well and lost control of the entire enterprise; after Saruman arrived, Gríma Wormtongue killed Lotho in his sleep. Frodo and his companions would later see Saruman killed on his front porch, thus ending the Battle of Bywater.
Frodo then resumed living in Bag End and was joined by Sam, upon his marriage to Rosie. However, with wounds too deep to heal, in TA 3021 Frodo named Sam his heir and left to cross the sea into the Uttermost West. Bag End remained in the Gamgee family (later known as the Gardners) for at least three generations afterward.
The name Bag End name came from the real-life farmhouse in the tiny Worcestershire village of Dormston, in which Tolkien's aunt lived. It can also be seen as a pun on "cul-de-sac" (literally, "bottom of the bag"). In the books, it is supposedly a translation of the Westron Labin-nec, which has much the same meaning, and bears the same relationship to the Westron form of Baggins: Labingi.