In the story, Sherlock Holmes and the smitten Dr John Watson try to defeat a peg-legged man and his dwarf assistant. At the very outset of the novel Doctor Watson states that he has been watching Holmes takes cocaine three times a day for many months. Watson's reluctance to oppose Holmes is finally overcome and he confronts his friend about the potential ill effects of this prolonged usage.

Holmes explains that he finds the drug stimulates and clarifies his mind and that, without work to challenge his mental faculties, he becomes bored with day-to-day life.

A young lady named Mary Morstan comes to consult Holmes upon a case which she assures him is very unusual. Miss Morstan's father disappeared some years previously under suspicious circumstances. He had obtained twelve months leave from his Indian regiment and sent word to her to meet him at his hotel. Whilst the hotel confirmed that he was staying there they informed Miss Morstan that he had gone out and not returned. Inquiries at the time produced no result. Major Sholto was Morstan's only known friend in London, the two had been in the same regiment together. Sholto had retired from service at that time and claimed not to have even known that Morstan was in the country…