Most of J.R.R. Tolkien's The Hobbit takes place in Middle-earth.
Middle-earth is the setting for The Hobbit, The Lord of the Rings, and much of Tolkien's related mythology. It is not a separate planet; in Tolkien's conception, it is a mythic version of the inhabited world during an imagined period of its remote history.
Bilbo's journey crosses several important regions of Middle-earth, including the Shire, the Misty Mountains, Mirkwood, and the Lonely Mountain. These locations connect the domestic world of the hobbits with the older realms of elves, dwarves, and dragons.
A common misconception is that Middle-earth means only the Shire or only the territory shown in the films. Tolkien used the term much more broadly. The name comes from older Germanic and Old English expressions for the inhabited lands between or within larger cosmic realms, and Tolkien adapted that tradition for his legendarium.