When she returns home to the old Morgan house, now named "Ingleside", she is greeted by her five children: James Matthew ('Jem'), the eldest, now aged seven; Walter Cuthbert, who is about six and often thought to be a bit of a 'sissy' because of his love for poetry; fraternal twins Anne ('Nan') and Diana ('Di'), who are five and look nothing alike, Nan with brown hair and hazel eyes, and Di with red hair and green eyes; and finally Shirley, two years old and Susan Baker's favourite, as she took care of him as an infant while Anne was very sick following his birth.

The book includes the dreadful, seemingly eternal visit of Gilbert's disagreeable, oversensitive aunt Mary Maria Blythe, who was only supposed to stay two weeks but lingers on for months and only leaves, much to the relief of the family, when Anne unintentionally offends her by arranging a surprise birthday party.

During the novel, which spans a period of about six years, Anne and Gilbert's youngest child is born and is named Bertha Marilla Blythe.

In many of the adventures, the honest Ingleside children are taken in by children who tell lies in order to seem more interesting: Nan is deceived by a lying schoolchild into thinking that she was actually switched at birth; Walter is convinced by an older boy that his mother is dying; and Di gets two stories, in both of which she makes friends with schoolgirls who deceive her.

The Blythes' third son Shirley is present in the book, but oddly gets no solo "spotlight" story of his own, which is also the case in Rainbow Valley, the next volume in the series.