In May, I started re-reading The Lord of the Rings. The last and only other time I read it was for a class (for which I had to rush through the book in about three weeks), so it's been interesting being able to read it slowly and actually pay attention to things.
A few days ago, I finished The Two Towers, and in two different chapters I'd found that Tolkien employs extended Biblical allusions. The first is in Book Three, Chapter 10 "The Voice of Saruman." Gandalf leads a party to Orthanc to talk to Saruman, and he warns them to beware of his (Saruman's) voice. The narration describes that "all that it said seemed wise and reasonable, and desire awoke in them by swift agreement to seem wise themselves." This is similar to the serpent's temptation in Genesis 3: "But the serpent said to the woman, 'You will not surely die. For God knows that when you eat of it your eyes will be opened, and you will be like God, knowing good and evil.'" (Genesis 3:4) Both the serpent and Saruman appeal to the desire of knowledge; the serpent to "knowing good and evil," and Saruman to "seem[ing] wise." When Éomer tries to dissuade Théoden from listening to what Saruman suggests, Saruman himself makes the connection between deceptive talk and snakes: "'If we speak of poisoned tongues what shall we say of yours, young serpent?' said Saruman."
After Gandalf reveals that he is no longer Gandalf the Grey, but Gandalf the White, Saruman's staff breaks. "There was a crack, and the staff split asunder in Saruman's hand, and the head of it fell down at Gandalf's feet." The significance here, with regard to the Biblical allusions, is the head and the feet. After the serpent's deception, God curses him, saying, "'I will put enmity between you and the woman, and between your offspring and her offspring; he shall bruise your head, and you shall bruise his heel'" (Genesis 3:15). (I think some translations of the Bible have it as "he shall crush your head," with which Tolkien's "split[ting] asunder" fits more closely, image-wise.) Here, with Saruman as the serpent, that head bruising is fulfilled in the splitting of the staff and the head's falling down to Gandalf's feet. There's no bruising of the heel though, and I think that's because this is Gandalf the White. In the same way that man could not overcome sin until after God is incarnate in Christ, Gandalf could not overcome Saruman until after he's become Gandalf the White. At least, that's if my grasp of theology and The Lord of the Rings is correct. So, in a way, through the Biblical allusions, Tolkien connects sin and the power of Sauron, who is working through Saruman.
The second set of allusions I discovered is in Book Four, Chapter 8 "The Stairs of Cirith Ungol." The setting is described as a "valley of shadow and cold deathly light," which is a fairly blatant reference to Psalm 23, specifically "the valley of the shadow of death" in verse 4. Tolkien just changed "death" from a noun into an adjective. In the same way that Tolkien uses the Biblical allusions to Genesis 3 to strengthen his own setting and characters in Book Three, Chapter 10, he uses the pastoral imagery of Psalm 23 to strengthen the contrast between Mordor and Galadriel in Book Four, Chapter 8. The Ring Wraiths come close to where Frodo and Sam are hiding, but instead of clutching the Ring, Frodo holds on to the phial of Galadriel. A little later Frodo "took his staff in one hand the phial in his other." This is a mirror of the later half of Psalm 23:4 - "your rod and your staff, they comfort me." The staff that Faramir gave Frodo and the phial of Galadriel help Frodo on his way to Mordor in a similar manner that the shepherd's rod and staff comfort the sheep in the pastoral language of Psalm 23. Near the end of the chapter in The Two Towers, there's also a reference to the "green pastures" and "still waters" of Psalm 23:2. "'Sleep!' said Frodo and sighed, as if out of a desert he had seen a mirage of cool green."
In both of these instances, the allusions that Tolkien uses strengthen his descriptions and characterizations.