Watson gets a telegram one morning, asking him to meet Holmes at the train station for an adventure. Watson’s wife encourages him to go. So he does. Holmes escorts Watson to a small town in Boscombe Valley, where a man named Charles McCarthy has been murdered.

McCarthy has been living as a tenant on the land of his much richer acquaintance, John Turner. Both of them knew each other back in Australia, where Turner made it rich. McCarthy has a son, James, and Turner has a daughter.

McCarthy was killed by a blow to the back of the head while standing next to Boscombe Pool. Witnesses saw McCarthy walking towards the pool, followed quickly by his son, James; they also saw the two of them fighting violently. James is found near the body of his father with blood on his hands.
Holmes is not so sure. Witnesses mention that Charles McCarthy called out “Cooee” to James – but how could he have known that James was behind him? McCarthy didn’t even know that James was in town. James’s statement does add two new pieces of evidence: his father’s last words were something about “a rat,” and James noticed a grey cloak on the ground next to his father’s body when he ran over to see him. When James looked up, the cloak was gone. Holmes goes to see James.

He finds out that James has no idea who killed his father. Inspector Lestrade, the Scotland Yard officer who loves giving Holmes a hard time, is sure that James is guilty.

But Holmes keeps defending James: after all, he notes, “Cooee” is an Australian cry, and McCarthy’s last words weren’t “a rat” but “Ballarat,” an Australian city name.

Holmes, meanwhile, has arranged a meeting with John Turner. It turns out that it was Turner who McCarthy was meeting by Boscombe Pool. Turner was a robber back in Australia, and McCarthy knew about it. He had been blackmailing Turner for years. The last straw was that McCarthy had been trying to make his son marry Turner’s daughter.

But Turner will not tolerate it. So he picked up a rock and hit McCarthy over the head. When he heard James coming to the pool, he ran off, dropping his cloak. He managed to grab the cloak without being seen and got away. Turner agrees to sign a confession so that, if James McCarthy is convicted of murder, Holmes can get the young man off. But Turner is dying, and doesn’t want to spend his final days in prison. Holmes agrees that Turner’s about to meet a higher judge than England can provide. Fortunately, James’s case is dismissed due to lack of evidence, James marries Miss Turner, and John Turner takes his secret to the grave seven months later.