Christmas has just passed when Dr Watson goes to Baker Street to see Sherlock Holmes. On his arrival he finds his friend thinking over a battered hat brought to him by a commissionaire named Peterson. It came into his possession when Peterson witnessed a scuffle in the street; the victim dropped both his hat and his Christmas goose. He has brought them to Sherlock Holmes so that they might be returned to their owner as Peterson has no clue as to work out his identity for the man fled after the attack.

However, Holmes thinks it unlikely that the owner will be found, and sends Peterson home to cook the goose, but the man returns and produces the blue carbuncle, claiming that it was found inside the bird. Naturally, Holmes realises that there is a larger mystery here and sets off to discover what it is.