Smaug was said to be the greatest dragon of his time. He was one of the last fire-drakes, presumably bred in Angband by Morgoth with the other dragons, late in the First Age.

Sometime in the 2700s of the Third Age, he got wind of the great hoard of the dwarves in Erebor. In the year 2770, he descended on the mountain in flames, and drove out or killed all the dwarves.

He gathered together all the treasure in one of the great caverns of the mountain, and made himself a great jeweled bed. The men of Lake Town soon forgot about him after he stopped raiding their town, and Smaug thought his fortress impenetrable.

In 2941 of the Third Age, he was disturbed. Thorin Oakenshield had come back to claim his title of King under the Mountain. Thorin sent Bilbo Baggins into the dragon's lair while Smaug was sleeping, and Bilbo returned with a small, two-handled cup. When Smaug awoke, he knew something was missing and he flew out to attack the thief. Smaug smashed up the mountain, and burnt what little grass there was there, and then went on to Lake Town.

He had one soft spot in his iron-like hide, and that was in the hollow of one shoulder. Bilbo discovered that, and it helped Bard the Bowman to shoot down the dragon. Smaug died and fell into the lake.

Soon, all that was left of him was his bones and the jewels encrusted in his hide.