Anne Shirley arrives in the town of Pringleton, where she will be vice-principal of the local school until her marriage to Gilbert Blythe.

She eventually finds a place to live at Windy Poplars, a lovely house owned by Kate, her brother Matey, and their housekeeper Rebecca.

She also meets Betty Grayson, an orphaned girl who lives next door with her cruel aunt Ernestine Pringle, and who changes her name depending on how she feels.

The school principal, Mr. Gibson, tells Anne that she will teach an English class, direct the Dramatic Club, and instruct girls' gymnastics, in addition to vice-principal duties.

Back at Windy Poplars, Matey shows Anne a log book from his days of sailing with Captain Isaac Pringle, the founder of Pringleton and Hester's late husband.

Anne realizes the diary is why Hester fears the residents of Windy Poplars, as it shows that Isaac was a smuggler and pirate.

Hester is being treated for a heart condition but she ignores the doctor's orders and throws her medication away while Catherine takes Jen's place in her bedroom.

At the same time, Gilbert diagnoses Betty with pneumonia, so Anne tries to boost the girl's spirits by acting out the entire show just for her.

In a contemporary review in The New York Times, critic Theodore Strauss concluded: "It is, simply, the story of the little school marm, full of sweetness and light, who descends upon a small town dominated by as unpleasant a family tribe as Hollywood has ever gathered under one roof.

How she ultimately wins them over is told in dialogue so laced with bromidic beatitudes and with so much nonsensical gush that one observer at least came away feeling as though he had eaten a box of marshmallows.