Are hobbits human and just really short? Or are they some entirely other species, like a gold-hoarding dragon? In high-school biology class they teach you to define species in terms of interbreeding.
A horse is something that can make nonsterile babies with other horses; it may mate with a donkey, but since their offspring are sterile mules, horses and donkeys count as separate species. By that standard, the most relevant J.R.R. Tolkien passage comes from Appendix A of the Return of the King:
There were three unions of the Eldar and the Edain: Lúthien and Beren; Idril and Tuor; Arwen and Aragorn. By the last the long-sundered branches of the Half-elven were reunited and their line was restored.
It helps to recall here that Eldar is another word for elf and Edain is another word for human. Tolkien is saying here that there were two human-elf pairings in the backstory to the Lord of the Rings. One between Lúthien and Beren and another between Idril and Tuor. Both Arwen and Aragorn are descendants of one of these pairings. So when they get together in the course of the series, they reunite the half-elven lines.
Given that these pairings are clearly possible and fruitful, one might wonder why they seem to be so exceptionally rare. Chalk it up to magic, if you like, or perhaps it’s a question of prejudice.
What about other species? Aragorn says he fought half-orcs under the control of Saruman at Helm’s Deep. Fans discussing the possibility of hobbit or dwarf hybrids on Tolkien forums don’t come up with any textual references to specific instances, but they do offer some strong evidence that they are possible.
The prologue to the Fellowship of the Ring states that “it is plain indeed that in spite of later estrangement Hobbits are relatives of ours: far nearer to us than Elves or even than Dwarves.”
If human-elf hybrids are possible, and dwarves and hobbits are taxonomically more closely related to humans than elves are, then it seems plausible that human-hobbit, human-dwarf, and hobbit-dwarf hybrids would also be possible. By that standard, perhaps, hobbits are humans—just short ones.
On the other hand, perhaps the existence of occasional half-elvish children is a magical phenomenon, and despite the even closer human-hobbit genetic relationship, no interbreeding is possible under natural conditions.
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