When Montreal industrialist Blair Stanley is indicted for embezzlement, he sends his 10-year-old daughter Sara to the small town of Avonlea on Prince Edward Island, where she lives with her two aunts, Hetty and Olivia King.
After inadvertently helping a con-man skip town with the proceeds raised for new books for the school library, Sara launches a number of money raising schemes to recoup the funds. Jasper Dale, the town recluse who is painfully shy, comes to the rescue and puts on a memorable magic lantern show.
Circumstances throw Rachel Lynde, the most disagreeable woman in Avonlea, and Alexander Abraham, the most disagreeable man in Avonlea, along with Sara and Felix, in close quarters while waiting out a Small Pox outbreak. Everyone learns not to take things on face value, and Sara shows everyone about making friends.
Fans of 'Anne of Green Gables' will remember Marilla getting on Anne's case for her wild imagination. Now the shoe is on Mirilla's foot - during a gossip section at the town's Sewing Circle where Sara is trying to learn simple stitches despite the less than helpful remarks from Hettie and Felicity. Marilla makes up a tale which ends up coming true, to her chagrin, for now the gossips will have much more to say about the tarnish on her honest reputation.
When Felix throws a rock through the window of the Old Lloyd house, Sara soon discovers that the reclusive old woman is more than she seems and that she might have a startling connection to Olivia's good friend, aspiring concert singer Sylvia Gray, who has come to Avonlea for a visit.
Alec and Janet go away to celebrate their wedding anniversary, leaving Felicity in charge. When Hetty makes a trip to Charlottetown to settle a water rights dispute, Sara is sent to stay with her cousins and immediately clashes with Felicity and her know-it-all attitude.
Instead of taking care of a husband, Janet's spinster sister, Abigail Ward, has funneled her energies into being a meticulous homemaker despite not really enjoying it. Things may change when into her life returns Malcolm McEwan, an old beau who has been away from Avonlea for seven years. He has returned to make good on a promise: Abigail's father would not allow the two to marry until Malcolm made a fortune, which he has now done in Yukon gold. He now wants to marry Abby as he calls her. Abby is in a quandary. She likes having the attention of a man, but realizes that...
A former student teacher of Hettie's and her husband die leaving no will, but plenty of property and a small baby. Hettie and Rachael Lynde battle over who will care for the child, but Sara and Felicity have a better idea they have found the perfect couple to be the child's parents. However the law has other ideas.
It doesn't sit well with Hetty when Sara convinces Peter Craig that not only should he attend church with the family, but that he should also spend sometime playing with the other kids in an effort to get them to stop teasing him about his father who is in jail. Meanwhile, Peg Bowan, the Witch of Avonlea has also been convinced to go to church much to the chagrin of the townspeople.
An upcoming spelling bee shows that there is more than one definition for the word "witch" ... and that Peg Bowen isn't as much of a witch as some of Avonlea's prominent citizens - Hetty and Janet King.
Judson Parker is passing through Avonlea, he a candidate for the provincial election being held the following week. He is trying to buy his way to an election win. Some of the Avonlea voters see through his tricks, however some out of circumstance get caught up in his manipulation. Meanwhile, it's Harvest Festival time, and the children in particular are looking forward to the party. Felicity is sure she will win best costume as she does every year. Clemmie, who does like harvest time, doesn't seem to allow herself to enjoy the party due to her shyness. Sally and Jane...
The King's Aunt Arabella has just passed away. For fifty years in the King's attic sat her blue chest, which she asked to be opened only after her death. She left it there when she left Avonlea for good shortly after her fiancé committed suicide the day before their planned wedding. There is great anticipation amongst the family of treasures in the chest, but they find primarily moth eaten wedding mementos. Sara is certain that there is more - why would Arabella forbid the chest to be opened otherwise - and she indeed does find something hidden in the chest, something...