Smaug is described as a red-golden dragon, with bat-like wings and a huge tail. His jaws and nostrils were always emitting smoke, but the fires inside him burned low when he was at rest. His red-golden scales were tough enough to deflect most blades, but these only covered his upper hide. Knowing that his soft underbelly was his weakness, he had spent many years sleeping on his hoard, causing a crust of gold and jewels to stick to his belly. However, unbeknownst to him, his armor was still imperfect; there remained a spot on his left breast "as bare as a snail out of its shell."[7]

Smaug is shown to be, cunning, violent, cruel, arrogant, and greedy, possessing an unquenchable desire for gold. His most distinguishing characteristic (aside from his greed) is his arrogance, as Smaug proudly boasts of his superiority and impregnability to Bilbo during their encounter. However, this proves to be his downfall, as he unwittingly reveals the weak spot in his chest to Bilbo when showing the Hobbit how he had willfully coated his underbelly in treasure to protect it.

Though he was a clever beast, his second weakness seems to be his rage in itself. While destroying Lake-Town, he swooped down straight through an arrow-storm, "reckless in his rage, taking no heed to turn his scaly sides towards his foes, seeking only to set their town ablaze."[8] In his fury and revelry, Smaug neglected to guard himself, exposing his belly and giving Bard the chance he needed to slay him.

Smaug seems primarily motivated by personal greed rather than a desire to do evil, and does not seem to serve any allegiance other than his own. While he does ruthlessly destroy Dale and lays waste to the Dwarves of the Lonely Mountain during his attack on the Lonely Mountain, once he has assumed dominion of the region he seems content to allow the rest of Middle Earth to go about its business, so long as he or his treasure remains undisturbed; although this could be because he feels that the people living in the region have nothing he wants. Highly intelligent, Smaug appears to possess a rather sardonic sense of humor, darkly mocking Bilbo while they converse within the Lonely Mountain's treasure chamber. Smaug seems to despise the Dwarves, considering them to be weak and pathetic creatures far beneath him, making unfavorable comments about Thrór and showing no remorse over his slaughter of their kind and claiming of their kingdom. While conversing with Bilbo, Smaug is also able to quickly surmise the reason for Bilbo's presence in Erebor, and also correctly deduces that the Dwarves received aid from the men of Esgaroth in reaching the mountain.