We see the transformation of Bilbo in The Hobbit, but the theme of transformation becomes more wide-scale in the Lord of the Rings. Strider, a weather-beaten ranger, transforms into Aragorn, son of Arathorn and the king of of Gondor. Tolkien hints at this transformation many times throughout the Fellowship to constantly build up the suspense. Gandalf transforms from the grey wizard to the white wizard. We even see the transformation of Legolas and Gimli (Elves and Dwarves) as they become best friends. Theoden is transformed back to normal from his corrupted form. And all four of the hobbits in the Fellowship, (especially Pippin) show substantial transformation. You can also go on the opposite side of the spectrum: Smeagol to Gollum, Borimir’s transformation (desire of the ring), and Saruman’s corruption - thirst for power and the ring.
Wizards, men, elves, dwarves, and hobbits all show signs of transformation in the Lord of the Rings.