The Prancing Pony was an inn in the village of Bree, capital of the land of the same name. It was based inside the central hub of the town near the stables, and various merchant stalls. Since Bree was built on the major road of the Greenway, it was a fairly well traveled inn, and was so accustomed to hobbits that they had even built hobbit rooms specialy for them.
In the years leading up to the fabled Quest for Erebor, Gandalf the Grey met up with Thorin Oakenshield in the inn by chance. Thorin, who wished to slay the dragon of Smaug and reclaim the his kingdom of Erebor and retain his rightful place as king of Durin's Folk. Gandalf met him there and he, who also wanted Smaug dead for reasons of his own, aided Thorin in finding a burgalar, and fourteenth member of his company.
Mere days before the hobbits Frodo Baggins, Samwise Gamgee, Peregrin Took and Meriadoc Brandybuck arrived in the Prancing Pony on their quest to bring the ring to rivendell in 3018, some 60 years after the events leading up to The Quest for Erebor, the Ranger Eradan, the elf Andriel, and the dwarf Farin all met up with Aragorn, cheiftain of the rangers, to plan out a raid on Fornost in order to distract them from joining in on the hunt with The Nazgul.
At this time the inn was run by a man named Barliman Butterbur, and the hobbits arrived days later to meet him. They met Aragorn, left there by Gandalf, who helped them along the road in the next day. However that night the room they were supposed to be staying in was attacked by the Nazgul, but they had luckily and cunningly moved rooms. The hobbits and Aragorn made off through the Low-lands the next day.
- In The Chronicles of Narnia: The Horse and His Boy, a fantasy novel by Tolkien's good friend C. S. Lewis published the same year as The Lord of the Rings, Bree is the name of a "prancing pony" who could talk.