The film opened with an 8-minute prologue spoken by Galadriel (Cate Blanchett) explaining the backstory of the legend of the ring - it told how the Great Rings were forged and then distributed; however, those who received rings had been deceived since a new Master ring was also forged (in secret) in the fires of Mount Doom by the Dark Lord Sauron in the land of Mordor, in order "to control all others" and to rule over them with cruelty, malice and domination.
The free peoples of the lands of Middle Earth were on the verge of destruction. In one final battle near Mount Doom against the armies of Mordor, Sauron killed King Elendil of the kingdom of Gondor, after which his son Isildur defeated Sauron (with Elendil's Narsil sword) and acquired the ring, but the ring corrupted him too. For 2,500 years, "the ring passed out of all knowledge" until acquired by the creature Gollum (Andy Serkis) in a dark cave ("My precious"), giving him long life for 500 years, yet it consumed him and poisoned his mind.
When the ring abandoned Gollum, it was acquired by Bilbo Baggins (Ian Holm), a "halfling", fur-footed hobbit of the Shire. Now Sauron was in pursuit to reclaim the ring that gave its possessor invincible power and threatened to cover the lands with darkness.
As the film began, Bilbo was celebrating his "eleventy-first" (111th) birthday. He bequeathed all his possessions (including the ring) to his nephew, adopted heir Frodo Baggins (Elijah Wood), while he told Frodo he was leaving to stay in Rivendell. Wizard Gandalf (Ian McKellen) instructed Frodo to leave the shire with the ring and proceed to the village of Bree with his gardener friend Sam (Sean Austin). Nine dark, horse-riding faceless Nazgul (or Ringwraiths) sent by Sauron to recover the Ring pursued Frodo and his companions, now including two other hobbits Merry (Dominic Monaghan) and his best friend Pippin (Billy Boyd).
Meanwhile, Gandalf met with corrupted sorcerer Saruman (Christopher Lee) at Isengard, where he learned that Saruman was in league with Sauron's plans to dominate Middle-Earth. At Bree in the Inn of the Prancing Pony, the group met Strider/aka Aragorn (Viggo Mortensen) (the wandering, outcast, exiled heir of Isildur to the throne of Gondor) who helped protect and guide them. Saruman was creating an army of fiercesome, zombie-like Orcs (with rotting bodies) to do his will by cutting down forests and forging weapons. The Hobbit group and Strider proceeded to the elf enclave of Rivendell after Frodo was stab-wounded by a Ringwraith's sword (a Morgul blade).
Gandalf miraculously escaped from Saruman's imprisonment on the back of an eagle and proceeded to Rivendell, where after a six days journey, Frodo was rushed on horseback by elf Arwen (Liv Tyler). There, Frodo was healed by her father Elrond (Hugo Weaving). Arwen pledged her love to Aragorn, telling him: "I choose a mortal life" - she chose to forsake the immortal life of her people for Aragorn's love. During a Council meeting led by Elrond to answer the threat of Mordor and determine how to destroy the Ring (the one place it could be destroyed was in the fires of Mount Doom in Mordor where it was forged), Frodo volunteered ("I will take it") - he was to be accompanied there by the "Fellowship of the Ring" - nine individuals including himself, Sam, Merry, Pippin, Gandalf, swordsman Aragorn, skilled archer elf Legolas (Orlando Bloom), axe-wielding dwarf Gimli (John Rhys-Davies), and Boromir (Sean Bean); Bilbo gave Frodo a magical sword and Mithril (a protective vest) for the journey.
After reaching an impasse through the treacherous wintry pass on the mountain of Caradhras due to Saruman's sorcery, they decided to travel under the mountain through the dwarven Mines of Moria, a dark passageway where they were confronted by a giant cave troll in Balin's Tomb and an army of Orcs. At the Bridge of Khazad-dum, Gandalf held off the fiery demonic Balrog ("You shall not pass") so the others could escape, although he fell (seemingly to his death) into the chasm after Balrog when his leg was caught by Balrog's giant whip.
The group emerged from the mines into the magical forest of Lothlorien, ruled by the Lady of the Wood Queen Galadriel and her husband Lord Celeborn (Marton Csokas), where they found rest. Galadriel showed Frodo the future in a watery mirror - his destiny was to be a Ring-bearer and to destroy the Ring ("This task was appointed to you"). Before they left, Galadriel gave Frodo a farewell gift - the Light of Earendil (or Star-Glass). The group proceeded on the River Anduin (with two impressive colossal statues) and disembarked at Parth Galen.
Boromir confronted Frodo in the woods and sought to take the Ring, to save his afflicted land of Gondor with the ring's power ("It should be mine. Give it to me!") - to escape, Frodo vanished momentarily when he put the ring on his finger. In contrast, Aragorn refused to take the Ring from Frodo when he had the opportunity and pledged his steadfast allegiance.
Frodo decided to proceed to Mordor alone as the rest of the group was attacked in the forest by Saruman's Uruk-hai (Orcs cross-bred with men), commanded by Lurtz (Lawrence Makoare). Boromir lost his life with three arrows from Lurtz' bow in his torso. An angered Aragorn decapitated Lurtz, and then went to the side of Boromir as he expired and confessed his wrongful obsession with taking Frodo's ring. When Aragorn replied that Boromir was forgiven, he also promised that he wouldn't allow the kingdom of Gondor to fall into ruin: "I do not know what strength is in my blood, but I swear to you, I will not let the White City fall nor our people fail"; then with his last few words, Boromir expressed his allegiance to Aragorn as his king: "Our people. Our people. I would have followed you, my brother. My captain. My king".
During the struggle, Merry and Pippin were captured and taken away by the monstrous warriors, and the remaining members of the group decided to pursue them to rescue the two Hobbits. In the final scene, Frodo was joined by loyal companion Sam as they continued on to Mordor.
