The story opens on Christmas Eve with Vanka, a poor orphan of age of nine, sitting down to write a letter to his grandfather living in a unknown village in Russia. After his mother's death, Vanka is transferred to new masters in Moscow to live with family of Alyahim the shoemaker. Alyahin and his wife oppress the little orphan, who grows frustrated with the situation and tries to contact his grandfather to ask him for help.
As he writes the letter, Vanka recalls his grandfather and his life at the village before he was apprentices to this new home. After the letter is finished, the little boy puts down the name of his grandfather, Konstantin Makarich, and as address he writes down "the village". He is also not aware of the fact that letters in order to be sent need to have a stamp. In good hopes, Vanka throws the letter into the nearest post-box and goes to sleep happily dreaming about his grandfather sitting by the stove and reading the letter to the cooks.