Smaug is said to be one of the last great dragons of Middle-earth who has captured the Lonely Mountain with all its treasures, destroying the dwarves' kingdom and the nearby township of Dale. The dragon is the main enemy in "The Hobbit"; no one knows about his origin, but he is described as the most evil fire-breathing dragon of the Third Age.
Covered with hard scales, his body was red-golden in color and seemed to be invulnerable, except for a bare patch in the hollow of the left breast. Smaug had a long tale, strong wings and sharp teeth and claws, and used to sleep with one eye open to keep watch over the stolen treasure. He is also known for his acute sense of smell which helped him to find out even the number of people arrived near his den.
In the large hall at the Lonely Mountain's root the dragon cumulated dwarves' treasures into a great pile and used it as a bed. The years passed, and the inhabitants of the Long Lake almost forgot about the dragon's existence, only Thorin kept the treasure in mind and wanted to take vengeance on Smaug.
It was the autumn of 2941, one hundred and seventy-one years after his arrival in Erebor, when the dragon awoke to discover a single two-handled cup had been stolen. He got very angry and flew out seeking the chief, but found no one, because he didn't know about the secret door in the side of the mountain. That was Bilbo who came into the dragon's den and took a cup; a peaceful hobbit was hired by Thorin, the King in Exile, and the dwarves.
Next day the hobbit came back, but Smaug couldn't see him because of the magic ring and took him for a "barrel-rider". The dragon showed Bilbo the power and invulnerability of his body, but the hobbit noticed the chink in the dragon's armor. Bilbo became invisible and fled, and Smaug flew to Lake-town to destroy it, where he was shorted by Bard, a descendant of Girion of Dale. Slain by an arrow, the dragon landed on Lake-town and completely destroyed it.
Lake-town was rebuilt and Smaug's mighty bones could be observed in the quiet waters of the lake for many years.