In 2770 he came out of the North and descended upon the Lonely Mountain, where the Dwarves had a prosperous kingdom. He set fire to the woods and to the town of Dale and he slew the Dwarves and Men who tried to oppose him. Then he entered the Lonely Mountain through the Front Gate and routed the Dwarves from the halls and tunnels. Thror, the King Under the Mountain, was able to escape through a secret door with his son Thrain and they fled with the remainder of their people.

In the vast dungeon-hall at the Mountain's root, Smaug amassed the treasures of the Lonely Mountain into a great pile which he used as a bed. He emerged from the mountain from time to time to hunt prey, particularly maidens, until Dale was deserted. Lake-town on Long Lake was the closest to the Lonely Mountain that anyone dared to live.