Part I: The Reminiscences of Watson
Part I leads with a heading which establishes the role of Dr Watson as narrator and sets up the narrative stand-point that the work to follow is not fiction, but fact: "Being a Reprint from the Reminiscences of John H. Watson, MD, Late of the Army Medical Department."
The story begins in 1881, when Dr. Watson, having returned to London from Afghanistan, runs into an old friend, Stamford, who had been a dresser under him at St. Bartholomew's Hospital. Watson confides in Stamford that, due to a shoulder injury that he sustained in the Anglo-Afghan War at the Battle of Maiwand, he has been forced to leave the armed services and is now looking for a place to live. Stamford mentions that an acquaintance of his, Sherlock Holmes, is looking for someone to split the rent at a flat at 221B Baker Street, but he cautions Watson about Holmes's eccentricities.
Stamford takes Watson back to St. Bartholomew's where, in a laboratory, they find Holmes experimenting with a reagent, seeking a test to detect human haemoglobin. Holmes explains the significance of bloodstains as evidence in criminal trials. After Stamford introduces Watson to Holmes, Holmes shakes Watson's hand and comments, "You have been in Afghanistan, I perceive?" Though Holmes chooses not to explain why he made the comment, Watson raises the subject of their parallel quests for a place to live in London, and Holmes explains that he has found the perfect place in Baker Street. At Holmes's prompting, the two review their various shortcomings to make sure that they can live together.
After seeing the rooms at 221B, they move in and grow accustomed to their new situation.
Watson is amazed by Holmes, who has profound knowledge of chemistry and sensational literature, very precise but narrow knowledge of geology and botany; yet knows little about literature, astronomy, philosophy, and politics. Holmes also has multiple guests visiting him at different intervals during the day.
After much speculation by Watson, Holmes reveals that he is a "consulting detective" and that the guests are clients. Facing Watson's doubts about some of his claims, Holmes casually deduces to Watson that one visitor, a messenger from Scotland Yard is also a retired Marine sergeant. When the man confirms this, Watson is astounded by Holmes' ability to notice details and assemble them.
Holmes reads the telegram requesting consultation in a fresh murder case. He is reluctant to help because credit would go entirely to the officials. Watson urges him to reconsider so Holmes invites him to accompany him as he investigates the crime scene, an abandoned house off the Brixton Road.
Holmes observes the pavement and garden leading up to the house before he and Watson meet Inspectors Gregson and Lestrade. The four observe the crime scene, Holmes using a magnifying lens and tape measure. The male corpse, he's told, has been identified as Enoch Drebber. Blood has been found in the room but there is no mark on the body. They also learn from documents found on his person that he was in London with his secretary, Joseph Stangerson. On one wall, written in blood, is "RACHE". Correcting an erroneous theory of Lestrade's, Holmes remarks that it is the German word for "revenge." He goes on to deduce that the victim died from poison and supplies a description of the murderer: six feet tall, disproportionately small feet, florid complexion, square toed boots, and smoking a Trichinopoly cigar. His right-hand fingernails are long and he came in a cab whose horse had three old shoes and a new one. Holmes says "RACHE" was a ploy to fool the police. Upon moving Drebber's body, the pair discover a woman's gold wedding ring.
Soon, Holmes and Watson visit the home of the constable who had first discovered the corpse, paying him a bit for disturbing his nocturnal sleep cycle. They get little information Holmes didn't already know, other than that a seemingly drunk loiterer had attempted to approach the crime scene. Holmes chastises the officer for not realising that this was the murderer himself in disguise. They leave and Holmes explains that the murderer returned on realising that he'd forgotten the wedding ring.
Holmes dispatches some telegrams including an order for a newspaper notice about the ring. He also buys a facsimile of it. He guesses that the murderer, having already returned to the scene of the crime for it, would come to retrieve it. The advertisement is answered by an old woman who claims that the ring belongs to her daughter. Holmes gives her the duplicate, follows her, and returns to Watson with the story: she took a cab, he hopped onto the back of it, he found that she had vanished when it stopped. This leads Holmes to believe that it was the murderer's accomplice in disguise.
A day later, Gregson visits Holmes and Watson, telling them that he has arrested a suspect. He had gone to Madame Charpentier's Boarding House where Drebber and Stangerson had stayed before the murder. He learned from her that Drebber, a drunk, had attempted to kiss Mrs Charpentier's daughter, Alice, which caused their immediate eviction. Drebber, however, came back later that night and attempted to grab Alice, prompting her older brother to attack him. He attempted to chase Drebber with a cudgel but claimed to have lost sight of him. Gregson has him in custody on this circumstantial evidence.
Lestrade then arrives revealing that Stangerson has more recently been murdered. He had gone to interview Stangerson after learning where he had been rooming. His body was found dead near the hotel window, stabbed through the heart. Above his body was again written “RACHE”. The only things Stangerson had with him were a novel, a pipe, and a small box containing two pills. The pillbox Lestrade still has with him. Holmes tests the pills on an old and sickly Scottish terrier in residence at Baker Street. The first pill produces no evident effect, the second kills the terrier. Holmes deduces that one was harmless and the other poison.
Just at that moment, a very young street urchin named Wiggins arrives. He's the leader of the “Baker Street Irregulars”, a group of similar homeless children Holmes employs to help him occasionally. Wiggins states that he's summoned the cab Holmes wanted. Holmes sends him down to fetch the cabby, claiming to need help with his luggage. When the cabbie comes upstairs and bends for the trunk, Holmes handcuffs and restrains him. He then announces the captive cabby as Jefferson Hope, the murderer of Drebber and Stangerson.
Part II: "The Country of the Saints"
The story flashes back to the Salt Lake Valley (in modern Utah) in 1847, where John Ferrier and a little girl named Lucy, the only survivors of a large party of pioneers, lie down near a boulder to die from dehydration and hunger. They are discovered by a large party of Latter-day Saints led by Brigham Young. The Mormons rescue Ferrier and Lucy on the condition that they adopt and live under their faith. Ferrier, who has proven himself an able hunter, adopts Lucy and is given a generous land grant with which to build his farm after the party constructs Salt Lake City. Years later, a now-grown Lucy befriends and falls in love with a man named Jefferson Hope.
Lucy and Hope become engaged to be married, scheduled after Hope's return from a three-month long journey for his job. However, Ferrier is visited by Young, who reveals that it is against the religion for Lucy to marry Hope, a non-Mormon. He states that Lucy should marry Joseph Stangerson or Enoch Drebber—both members of the church's Council of Four—though Lucy may choose which one. Ferrier and Lucy are given a month to decide.
Ferrier, who has sworn to never marry his daughter to a Mormon, immediately sends out word to Hope for help. When he is visited by Stangerson and Drebber, Ferrier is angered by their arguments over Lucy and throws them out. Every day, however, the number of days Ferrier has left to marry off Lucy is painted somewhere on his farm in the middle of the night. Hope finally arrives on the eve of the last day, and sneaks his love and her adoptive father out of their farm and away from Salt Lake City. However, while he is hunting for food, Hope returns to a horrific sight: a makeshift grave for the elder Ferrier. Lucy is nowhere to be seen. Determined to devote his life to revenge, Hope sneaks back into Salt Lake City, learning that Stangerson murdered Ferrier, and that Lucy was forcibly married to Drebber. Lucy dies a month later from a broken heart; Drebber, who inherited Ferrier's farm, is indifferent to her death. Hope then breaks into Drebber's house the night before Lucy's funeral to kiss her body and remove her wedding ring. Swearing vengeance, Hope stalks the town, coming close to killing Drebber and Stangerson on numerous occasions.
Hope begins to suffer from an aortic aneurysm, causing him to leave the mountains to earn money and recuperate. When he returns several years later, he learns that Drebber and Stangerson have fled Salt Lake City after a schism between the Mormons. Hope searches the United States, eventually tracking them to Cleveland; the pair then flees to Europe, eventually landing in London.
Returning to the main narrative, Hope willingly goes to a police station, where he finishes his story to Holmes, Watson, and the inspectors. In London, Hope became a cabby and eventually found Drebber and Stangerson at the train station in Euston about to depart to Liverpool. Having missed the first train, Drebber instructs Stangerson to wait for him at the hotel and then returns to Madame Charpentier's house. He is attacked by her son, and after escaping, he gets drunk at a liquor store. He is picked up by Hope and is led to the house on Brixton Road, which Drebber drunkenly enters with Hope. He then forces Drebber to remember who he is and to take a pill out of a small box, allowing God to choose which one dies, for one was harmless and the other poison. Drebber takes the poisoned pill, and as he dies, Hope shows him Lucy's wedding ring. The excitement coupled with his aneurysm had caused his nose to bleed; he used the blood to write “RACHE” on the wall above Drebber.
Hope realised, upon returning to his cab, that he had forgotten Lucy’s ring, but upon returning to the house, he found Constable Rance and other police officers, who he evaded by acting drunk. He then had a friend pose as an old lady to pick up the supposed ring from Holmes's advertisement.
Hope then began stalking Stangerson's room at the hotel; but Stangerson, on learning of Drebber's murder, refused to come out. Hope climbed into the room through the window and gave Stangerson the same choice of pills, but he was attacked by Stangerson and forced to stab him in the heart.
After being told of this, Holmes and Watson return to Baker Street; Hope dies from his aneurysm the night before his trial, a smile on his face. One morning, Holmes reveals to Watson how he had deduced the identity of the murderer and how he had used the Irregulars, whom he calls "street Arabs," to search for a cabby by that name. He then shows Watson the newspaper; Lestrade and Gregson are given full credit. Outraged, Watson states that Holmes should record the adventure and publish it. Upon Holmes's refusal, Watson decides to do it himself.
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