One of the last great Fire-drakes of Middle-earth, Smaug rose to prominence by laying waste to the town of Dale and capturing the Dwarf-kingdom of the Lonely Mountain (Erebor) with all of its treasure. These events occurred some 150 years before the events of The Hobbit, and Smaug was already centuries old at the time. The Hobbit recounts the tale of a party of dwarves (consisting of a few of the original residents of the Lonely Mountain and their descendants) and the hobbit Bilbo Baggins (their titular burglar) to recapture the mountain and kill the dragon. In the book, the dragon is sometimes called Smaug the Golden or Smaug the Magnificent.
Centuries spent sleeping atop his gold hoard caused gold and gemstones to become embedded in the flesh of Smaug's belly, augmenting the already essentially impenetrable armour of the scales that covered most of the rest of his body. However, when Bilbo observed Smaug in his lair, he discovered a small bare patch on the dragon's left breast. When Bilbo discussed this weakness of Smaug's with his dwarven companions, he was overheard by the thrush that roosted by the mountain's secret door. The thrush in turn told Bard the Bowman of Esgaroth. When Smaug attacked the town, Bard shot his Black Arrow into Smaug's weak spot, killing him.
Among the items in Smaug's possession were the Arkenstone and a number of mithril mail shirts, one of which was given as a gift to Bilbo by Thorin Oakenshield, the company's leader. In The Lord of the Rings, set years later, the shirt saved Bilbo's kinsman, Frodo Baggins, from injury several times.