Beyond the Sky and the Earth: A Journey into Bhutan by Jamie Zeppa -- The best first book on Bhutan. A young Canadian teacher arrives to volunteer in a remote eastern school and falls in love with the country and a Bhutanese man. Honest, beautifully written, and the closest thing to experiencing Bhutan without going there.
The Raven Crown: The Origins of Buddhist Monarchy in Bhutan by Michael Aris -- The definitive history of Bhutan's monarchy and how it emerged from the country's complex religious and political past. Dense but essential for understanding how modern Bhutan came to be.
Bhutan: Land of the Thunder Dragon by Francoise Pommaret -- A richly illustrated overview by one of the foremost Western scholars of Bhutan. Covers history, culture, religion, and daily life with authority and affection.
Treasures of the Thunder Dragon: A Portrait of Bhutan by Ashi Dorji Wangmo Wangchuck -- Written by one of the queens of the fourth king, this is an intimate portrait of Bhutanese life from the inside, with personal anecdotes about the royal family and Bhutanese traditions.
So Close to Heaven: The Vanishing Buddhist Kingdoms of the Himalayas by Barbara Crossette -- A broader look at the Buddhist kingdoms of the Himalayas with substantial sections on Bhutan. Good context for understanding the region.
A Field Guide to the Birds of Bhutan by Carol and Tim Inskipp -- Bhutan has recorded over 770 bird species in a country smaller than Switzerland. If you are a birder, this guide is indispensable. Even casual nature lovers will be astonished by what they spot.
Lonely Planet Bhutan -- The most practical guidebook for trip planning, regularly updated with current information on permits, costs, and itineraries. Useful as a supplement to the arrangement your tour operator makes.