Sharpe is embroiled in the British retreat through Portugal in 1810 from the defence of the ridge at Bussaco to the Lines of Torres Vedras, where the French offensive is successfully halted.

Sharpe discovers a Portuguese Army major, Ferreira, and his criminal brother, nicknamed "Ferragus" due to his size and strength, trying to sell a stockpile of flour to the advancing French, in contravention of Wellington's strict policy of stripping the land bare of any resources the enemy could use.

On the morning of the Battle of Bussaco, Lawford uses Sharpe's injuries as an excuse to temporarily relieve him of command of the Light Company and place Slingsby in charge.

Because of Slingsby's incompetence, the Light Company is separated from the rest of the regiment and almost overrun by the retreating survivors of one of the destroyed French columns.

Sharpe goes to Major Ferreira's house and finds it abandoned, except for his children's English governess, Sarah Fry, naked and locked in a room.

Ferragus, still seeking revenge against Sharpe, lures him, Sergeant Patrick Harper, and Vicente (along with Sarah) to a warehouse where he has hidden an enormous stockpile of food and other supplies for sale to the desperate French Army.

Instead, Slingsby disobeys Lawford's order to remain sober and is completely drunk when the French attack, forcing his junior lieutenant to take command.