TOM BOMBADIL is an enigma who was first spotted in the Old Forest by the four hobbits, and lives in the house of Tom Bombadil. He is known as the master of wood, water and hill – and to be resistant to the One Ring of Sauron.
“Tom Bombadil is the Master. No one has ever caught old Tom walking in the forest, wading in the water, leaping on the hill-tops under light and shadow. He has no fear. Tom Bombadil is master.” (Goldberry, FOTR, “In the House of Tom Bombadil”)

The House of Tom Bombadil
TOM BOMBADIL is married to Goldberry, the River-daughter who was also first spotted in the Old Forest.
While Tom was the master of wood, water and hill – he was not the owner of the woods.
He first spotted the four hobbits when he was picking water lilies for her – and they heard two songs, which they would later find to be from him and Goldberry.
Goldberry seemed to give off some elf vibes, but much like Tom Bombadil, it is possible that she also remains an enigma – coming from the Old Forest. She represented the seasonal changes in river lands. (Letter 210)
Tom led the hobbits to a penthouse where they would have a feast and spend the night.
‘“Who are you, Master?” [Frodo] asked.
‘Eh, what?’ Said Tom sitting up, and his eyes glinting in the gloom. ‘Don’t you know my name yet? That’s the only answer. Tell me, who are you, alone, yourself, and nameless? But you are young and I am old. Eldest, that’s what I am. Mark my words, my friends: Tom was here before the river and the trees; Tom remembers the first raindrop and the first acorn. He made paths before the Big People, and saw the little People arriving. He was here before the Kings and the graves and the Barrow-wights. When the Elves passed westward, Tom was here already, before the seas were bent. He knew the dark under the stars when it was fearless – before the Dark Lord came from Outside.” (FOTR, “In the House of TOM BOMBADIL”)
Thus it is implied that he has been around since the beginning of Arda. He had already known and heard about the hobbits and their families, and had dealings with the Elves.
Tom would be resistant to the One Ring of Sauron because he is the only master of himself in the land, and his land is not affected by Sauron. The ring would grow bigger on his hand, but he would not disappear after spinning the ring in the air and putting it around his finger holding it up to the candlelight.
The Barrow-downs
In the Barrow-downs the hobbits would leave to find Tom again, singing a song – and Tom would find them.
He appeared with six ponies, with their own five and one more who was Fatty Lumpkin who was larger, stronger, fatter, and older than their own ponies. Fatty Lumpkin would later be ridden by Tom Bombadil, much faster than he had promised.
Then Tom would give the ponies and blades to the hobbits – which they had appreciated.
The hobbits would be accompanied by Tom through the forest, though they would later beg to be accompanied again until Bree. But Tom refused, saying he will not pass the borders beyond the Barrow-downs having his house to mind and being waited there by Goldberry.
Commentary – movies, and why he didn’t destroy the ring
Tom Bombadil was cut from the movies because PJ thought the movies would be unnecessarily long if he was there. Many may find his resistance to the ring quite confusing – and wondering whether the ring was really as burdensome as it sounds.
It seems that Tom was a significant part but not directly into the story – as Tolkien had said it exhibited another point in his attitude to the ring and its failure to affect him, but also seeming to be an oddity. We also see in the chapters covering Tom – that the hobbits have dreams and visions of the past and future, Tom helps them get through the forest, and gives them ponies and weapons to help them.
“You must concentrate on some part, probably relatively small, of the World (Universe), whether to tell a tale, however long, or to learn anything however fundamental – and therefore much will from that ‘point of view’ be left out, distorted on the circumference, or seem a discordant oddity. The power of the Ring over all concerned, even the Wizards or Emissaries, is not a delusion – but it is not the whole picture, even of the then state and content if that part of the Universe…Tom Bombadil is not an important person – to the narrative…he represents something that I feel important, though I would not be prepared to analyze the feeling precisely…” (JRR Tolkien, Letters)
Furthermore, it is commonly speculated that if Tom was so resistant to the ring, why he didn’t take the ring to Mordor. However,…
“….ultimately only the victory of the West will allow Bombadil to continue, or even to survive. Nothing would be left for him in the world of Sauron” (JRR Tolkien, Letters)
Thus if Tom had the ring, it would be heavily reliant on if the West would carry over. But it is evident at the end of the Barrow-downs, that Tom would take little interest in lands beyond his house and possibly the Barrow-downs.
Thus his response when the hobbits begged him to accompany them would capture the essence of why Tom eventually did not destroy the One Ring despite being unaffected by it.