When they arrive at Brandywine, they find that a gate has been erected and that guards are posted to keep outsiders away. The Shire has fallen under marital law. Merry recognizes one of the Hobbit guards, who is please to see them alive but has orders from "The Chief's up at Bag End" that he must obey. It seems that Lotho Sackville-Baggins, who bought Bag End, has instated himself as Chief.
When Merry and Pippin climb the gate they are accosted by the Chief's Big Man, who opens the gate and runs away, never to be seen again. The hobbits enter the Shire and are given a list of "don't do's" which they ignore. They make themselves at home in the guardhouse, where they learn from the guards that life in the Shire is anything but pleasant. One of the guards tells them that food and drink are scarce, all of which is either kept for the Chief and his people or is being sent out of the Shire.
The next morning the hobbits make straight for Hobbiton, but are arrested by a "Shirriff" who tells them that they are to be handed over to the Chief's Men. They are also told that all the inns are closed, because they have been converted into quarters for the Sheriffs and no drinking is allowed. Also there are spies all around to inform Lotho of all the Shire happenings. Many of the sheriffs have no choice but to join up with the Chief because if they don't they are put in Lock-holes and even beaten up.
The arrested hobbits go along with the Sheriff and his escorts, noticing along the way that the Shire is ugly and overgrown with weeds. Some men tell them that Lotho Sackville Baggins is only working for Sharkey, who is the real boss. They mock the hobbits, who tell them that the King's men will be coming soon to restore order. When Pippin pulls his coat back and draws his sword, the men are scared.
Frodo tells his companions that he wants no blood spilled. He suggests that Lotho Baggins may be in trouble too, if Sharkey is the real cause of the problem. Sam goes off to Tom Cotton's farm to check up on Tom, Mrs. Cotton and Rosie, their daughter. Merry blows the horn and wakes the hobbits of Bywater. Tom is happy and surprised to see Sam, as is his daughter Rosie, who has long been in love with the good-natured hobbit.
The villagers assemble with axes and firebrands; they build barricades and enlist the help of others opposed to the police state the Shire has become. The leader of the ruffians is killed by Merry and the others surrender.
When this skirmish is over, the hobbits have time to survey the real damage at the Shire. Sam's nightmare has come true. Everything is ruined and his father has been kicked out. He is living with Farmer Cotton. Sam's father tells them that after Frodo left, Lotho began buying up the Shire bit by bit and sending foodstuff abroad. People who opposed him were locked up and food was taken away. Lotho became Chief, but even he was not as bad as Sharkey, who even locked up Lotho's old mother.
Sam's father scolds Frodo for selling Bag End, but Frodo soothes him by telling him of their adventures and Sam's new hero status. Before the day is up Pippin gathers many of his relatives and they stand ready to challenge the gathering ruffians. In the Battle of Bywater, seventy ruffians and nineteen hobbits are killed. When the fighting is over, the good hobbits return to Bag End to salvage their homes.
With a start, Frodo realizes that "Sharkey" is actually Saruman, who had warned them of his misdeeds in the Shire. Saruman laughs, insisting that he must be spared because of his former greatness. As Frodo is about to banish him, Saruman tries to kill him. Frodo still spares him, cheating him out of his revenge. Now the miserable Saruman owes his life to Frodo.
When Frodo offers Wormtongue forgiveness, Saruman says that Wormtongue has killed Lotho. Wormtongue comes out of his hiding place and kills Saruman. The old wizard shrivels up till only his bones are left. The bones rest right at the doorstep of Bag End.
The Shire has been scoured of evil, but it has yet to be restored to its original glory. Saruman, who recognizes that the hobbit has become a great leader, compliments Frodo. But Saruman offers a gloomy prediction, which is that Frodo's life will be far from easy. The narrative is submerged in this though, but only momentarily. Regrowth is about to occur.
It looks a long time for the cleaning up of the Shire. Prisoners must be released and rogue ruffians must be caught. Homes must be restored and rebuilt. There are no trees or plants, and the hobbits nearly despair until Sam remembers the soil that Galadriel gave him. He plants saplings all over the Shire and puts grains of the precious soil at the roots of these. He pays special attention to Hobbiton and Bywater. He saturates the soil of the Shire with the fine dust, and soon the Shire is restored to a greater glory than it has ever known.
Sam Gamgee marries Rosie Cotton and goes to live at Bag End with Frodo. Merry and Pippin live together at Crickhollow. Frodo grows old and his ailments bother him. Sam and Rosie have a daughter and they name her Elanor. When Elanor is six months old, and it is near Bilbo's hundred and thirty first birthday, Frodo asks Sam to accompany him on a journey. He hands over Bilbo's diary and his own account of the war of the Ring to Sam, so that he can complete it.
Sam thinks that Frodo is off to Rivendell, but when they come to the Hills, they hear the voices of elves and Sam is surprised to see Elrond, Galadriel and Bilbo. Sam than realizes that Frodo is going to the Grey Havens and that he cannot go with him.
Frodo asks Sam to rule the Shire. He tells him that he and Bilbo are going to take their resting-places now, because their work is complete and because Bilbo is old and he (Frodo) will never completely heal. Then a white ship steered by Gandalf comes for the two hobbits that had successfully borne the Ring. Merry and Pippin rush to the shore, telling Frodo that this is the second time he has tried to leave without saying goodbye. After the farewells are said, Gandalf takes his two hobbits into the Grey Haven. Sam, Merry and Pippin are left standing on the shores of Middle-earth.
The three companions turn back and ride to the Shire. Sam poignantly closes this chapter of his life, and the novel, by taking his daughter on his lap and announcing, "Well, I'm back."
The Grey Haven, symbolic of heaven, becomes the resting-place for Tolkien's two great heroes, Bilbo Baggins and his protÃ©gÃ©, Frodo. The novel opens with a changing-of-the-guard, and ends with the possibility of two more generations of leadership (Sam and Elanor). The test of any great novel is the openness of the reader to a sequel, whether in print or in the imagination. Tolkien, as a master of imagination, creates a rich vibrant world. The door is open for a new adventure. What's more, the door is open for a hero (or heroine) to pick up the ball and start it rolling once again.