A plumber, John Horner, is arrested just before Christmas and charged with stealing a famous jewel, the Blue Carbuncle, from Lady Morcar. He denies the theft - but he has a criminal record, and all the evidence is against him. After Holmes's doorman finds the Carbuncle in a Christmas goose, Holmes uses an old hat to track the goose to a poultry dealer, then traps the servant who stole the jewel and framed the plumber. The Blue Carbuncle has a dark history, and the stone features in the programme's opening credits with turbulent scenes from its past.

A young solicitor, John Hector McFarlane, seeks Holmes's help after retired builder Jonas Oldacre dies in a fire. McFarlane, who benefits from Oldacre's will, is suspected of murder and asks Holmes to clear his name. Holmes looks for another motive and another killer, and dresses up as a tramp to get the information he needs about the Oldacre household. The surprising answer he finds is that Oldacre is not exactly dead.