The Hobbit by J. R. R. Tolkien is as much a coming-of-age story of Bilbo Baggins as it is a tale of adventure. In the first chapter of the story we see Bilbo as a contented domestic figure, interested primarily in food and comfort. The wizard Gandalf and the discerning reader, though, spot something amiss in this picture of the home-loving hobbit. There is a romantic streak to Bilbo and a curiosity about the world outside the Shire as well as a love for tales of adventure. Although Bilbo appears conventional on the surface, one gets a sense that Bilbo is complicit with Gandalf's manipulations of him even if he approaches his new life as thief and adventurer with some trepidation.
At first, Bilbo remains his luxury-loving self, enjoying the adventure as spectacle, concerned about inadequacy of food, and somewhat fearful and unsure of his own abilities. As the adventure progresses, he gains physical strength and endurance and increasing confidence in his own skills and cleverness. He also begins to assert himself more. The key episode in his character development is Chapter 5, in which he ends up left on his own and encounters Gollum. He ends up using his own wits to escape a terrifying situation. Even more importantly, at the end of the chapter, he is called upon to decide what sort of adventurer he will become with his new found strength, and chooses a path of mercy and kindness, letting Gollum live despite knowing full well that Gollum had planned to eat him.
The transformation of Bilbo from home-loving hobbit to an equal of the dwarves in their life of adventure is seen in Chapter 8 when Bilbo saves the dwarves from the spiders and realizes the degree to which he has changed and become braver and stronger.