In partnership with Saruman, Lotho took his opportunity during the War of the Ring to extend his power over the Hobbits of the Shire. Eventually, with the help of the ruffians known as 'Sharkey's Men', he was able to establish himself as the sole leader of the Shire, taking the title Boss, or Chief. He re-ordered the rustic land of the Shire-folk using brutal authority, and enforced his will through the violent ruffians at his command.

Lotho's power began to wane when Saruman himself arrived from the south, fleeing from his defeat at Isengard. Eventually, Lotho disappeared altogether, and though his fate is uncertain, it seems that he was secretly stabbed in his sleep by Gríma Wormtongue. Unaware of his fate, the oppressed Shire-hobbits still referred to the 'Boss' of Bag End, though their country was under the power of Saruman the Wizard.