Bilbo awakes dreaming of home only to find himself still stuck on the rocks, but the eagles soon bear them far away and set them down at a great rock by a stream. There the eagles and the party part (122–123).
Gandalf then tells the party that his time with them is almost up as he has pressing business elsewhere. Amidst their pleas to stay, he does tell them that he knows of someone who lives nearby and that he means to find him. Bilbo begins to ask questions which leads to Gandalf revealing that this someone is a skin-changer, one who can transform from a man to a bear. He then informs them that this Beorn is easily angered and a few other things about how he lives (122–126).
As they continue to walk, they finally come upon fields of flowers habited by huge bees. They come to a belt of trees and Gandalf gives instructions about how they are to approach (by twos) and when (five minutes apart). With that he takes Bilbo and sets out. As they approach the house, horses spy them and trot off to inform Beorn of the arrival of strangers. Beorn greets them, none-to-friendly, and demands to know who they are. Gandalf introduces himself and Bilbo and drops the name of his cousin, the wizard Radagast. Beorn has heard of him and seems more open to them, but still demands to know what they want. Gandalf begins to explain the trouble they have had with goblins, which intrigues Beorn and he invites them in to tell the tale (126–129).
As Gandalf tells his tale, he begins to weave in mention of more than himself and Bilbo, which leads to him whistling and the arrival of Thorin and Dori. Beorn is not fond of dwarves, but he is fond of stories, so Gandalf continues and every few minutes the party grows a little more and more dwarves arrive at Beorn’s house until at last they are all there and Beorn announces that, true or not, the tale deserves at least a supper for them all (129–135).
With animals serving and Beorn telling tales of his own the party feasts. Beorn tells them of the dangerous forest they must cross through, Mirkwood. As the night progresses, Bilbo begins to fall asleep to the sounds of the dwarves singing after Beorn has left. As the songs end, Gandalf warns them not to stray outside until the sun is up. Bilbo wakes in the night and fears the noises he hears is Beorn in animal shape coming in to kill them all. He dives under his covers and falls back asleep (135–139).
Bilbo oversleeps (again), but there is still breakfast for him, and the party sees neither Beorn or Gandalf all day. The animals wait on them, and Gandalf reappears near supper time but won’t tell them anything until he has eaten. After he eats and sends smoke rings all over the house, he tells them that he was out tracking Beorn beyond the Carrock, and that there must have been a bear gathering at the house as there were all kinds of bear tracks outside that morning. Beorn appears the next morning, makes jokes at Bilbo’s expense, and invites them all to breakfast. At breakfast he is in a jolly mood because he has found out that the story Gandalf told was indeed true as he saw the burnt glade for himself and caught a goblin and warg and wrung the truth out of them. As now Beorn is their friend, Gandalf thinks it best to tell him their whole story so as to get as much help as they can from him (139–143).
Beorn gives them ponies (which they must send back upon reaching the forest), lots of food (packed well for easy carrying), and plenty of advice (most of it depressing) about crossing Mirkwood. The most important being don’t drink from or bathe in the water of the stream that crosses the path in Mirkwood and don’t leave the path. Beorn tells them that their initial plan of crossing Mirkwood by the forest-road, was no longer a safe route, and that the way he was sending them is little known and a much shorter trek to the Lonely Mountain once on the other side. They ride for three days and come upon Mirkwood early on the 4th (143–146).
They send the ponies back, but Gandalf keeps his horse, as he is leaving them at this point to go on his own errand. Yet they do not enter the forest until the next day. They unload the ponies and divid all that needs to be carried among them. Gandalf encourages them and challenges them and finally says good-bye for good with one last reminder to not leave the path (146–150).