Bilbo and the dwarves walk through Mirkwood, which is such a thick forest that after a day or so they do not see any sunlight hitting the ground. The nights are so dark that it is impossible to make out any shapes at all. Bilbo thinks the forest is worse than the goblin tunnels. Even the dwarves, who are used to tunneling, dislike the oppressive feel of this forest.

The travelers know they should not leave the path or drink the water from Mirkwood’s one stream, so they have to eat and drink only what they can carry. They try to shoot some of the animals they see, but they only manage to bring down a single black squirrel, which tastes terrible.

Eventually the travelers come to a wide stream with black water. Beorn has warned them not to drink it or touch it, so they are careful to follow his instructions. They spot a boat on the opposite shore and use a rope and hook to catch and drag it to them. They cross the stream in small groups. Just as the last group is crossing, a herd of deer appears, and the dwarves try to shoot them. One of the deer, in its hurry to get away, knocks Bombur into the water. Bilbo and the other dwarves pull Bombur out and find that he has fallen into an enchanted sleep. Now they have to carry him.

Eventually the food and water run out. The dwarves send Bilbo up a tree to find out if they are near the edge of the forest. They are quite near the edge, but they are in a small valley, so Bilbo only sees a sea of trees in every direction. He climbs down in dismay. That night, he and the dwarves spot lights in the forest. Bombur, who has finally awakened, tells them about a dream he has had in which he enjoyed a feast with wood elves, the king of whom had a crown of leaves. His stories make the hungry travelers reckless, and they all leave the path to go investigate the lights.

Three times Bilbo and the dwarves approach the lights, and three times the lights vanish. Soon the group is lost in the black forest, and everyone gets separated. Bilbo sits down at the base of a tree to sleep, and he awakens later to find his legs being tied up by a giant spider. He uses his sword to free himself and kill the spider. His success surprises him, and he begins to believe himself far braver than he had suspected. Afterward he has far more confidence. He names his sword Sting.

Bilbo puts on his ring and creeps deeper into the forest, looking for his friends. He finds them tied up by a colony of enormous spiders. Bilbo throws rocks at some of the spiders and kills them, then he lures the rest away with taunts and songs. When they are quite far away, he doubles back and begins freeing the dwarves.

The dwarves are all weak from spider poison, and many of them are injured. Although some have swords, they have difficulty fighting when the spiders return. Bilbo has hidden the existence of his ring since he found it, but now he uses it in front of the dwarves. After he leads them to safety, he explains how he found the ring and how he has used it. The dwarves are not annoyed at his lie; he has just saved them and they are grateful. They think he is clever and lucky, and they begin to turn to him for ideas. They ask him what they should do next, but Bilbo does not know.

Bilbo and the dwarves go to sleep. When they wake up, Dwalin finally notices that something is very wrong. Thorin, their leader, is not among them. In fact, he was captured by the elves who made the lights in the woods during the night. These wood-elves are secretive and mistrustful; moreover, they do not like dwarves. They believe the travelers were trying to attack them. They have questioned Thorin thoroughly, but he refuses to tell their errand through the Mirkwood. He only reveals that he and his companions were starving. He is now locked up in the wood-elves’ castle. He has plenty to eat and drink—because like all elves, wood-elves are basically good—but he does not know how to rejoin his friends. They do not know how to rejoin him, either.