In the opening scene, Sméagol and his friend Déagol are fishing near the Gladden Fields in the North of Middle Earth. Déagol is dragged into the river by a powerful catch and discovers the One Ring glinting in the river bed. He collects it and climbs out of the river. Sméagol sees him fondling it and as they both succumb to the Ring's power they begin to quarrel. Sméagol demands it saying that it's his birthday and it should be his present. The squabble turns into a fight and Sméagol strangles his friend with his bare hands to finally prise the Ring from his clenched fist. We are then shown how Sméagol was ostracised from his community and driven away. Suffering terribly from his loneliness and shame, Sméagol takes solice in his love for the Ring as it slowly tortures his mind. His hardships in the Mountains twist his shape into that of Gollum.

As the flashback ends, we are taken back to the present where, on the outskirts of Mordor, Frodo and Sam are resting in an alcove. Sam awakes and sees that his master has not slept, the days are also growing darker the closer they get to Minas Morgul and Mordor. Gollum arrives and urges them to move on. Away in the west, Aragorn, Legolas, Gimli, Gandalf, Théoden and Éomer are riding through Fangorn to Isengard, where they meet Merry and Pippin feasting among the wreckage of Isengard. They then go and see Treebeard at the Orthanc where Saruman has been trapped. Gandalf opposes Gimli's call to kill Saruman, saying that the wizard has no power any more and will pose no further threat. As they are talking, Pippin sees the palantír amongst the flotsam and is enamoured by it, but Gandalf quickly asks it from him and hides in under his cloak.

The group then rides to Edoras, where King Théoden has prepared a feast to 'hail the victorious dead' of the Battle of the Hornburg. There Éowyn shows affection for Aragorn which Théoden notices, he tells her that he his happy for her, Aragorn being an honourable man and the architect of the victory at Helm's Deep. Gandalf also expresses to Aragorn his concerns over the quest, Aragorn tells him to trust in what his heart tells him, that Frodo is still alive.

Gollum awakes in the night as Frodo and Sam are sleeping and goes off to one side to murmur to himself. His evil half senses some doubt in Sméagol and insists that if he can murder once (referring to Déagol) he can do it again. Gollum then begins leading Sméagol through their plan, to deliver the hobbits into the clutches of Shelob in Cirith Ungol, after which the Ring can be reclaimed. Sam hears this and proceeds to beat Gollum for his treachery, Frodo intervenes, saying that as their guide Gollum is necessary for their quest. Sam obliges as Gollum flashes him an evil smile while Frodo's back is turned.

That same night back in Edoras, Pippin's curiosity gets the better of him; relieving Gandalf of the palantir, he looks into it. Pippin sees a vision of a white tree in a stone courtyard set ablaze, but in doi