The plot revolves around a precious blue carbuncle (a garnet which can come in a variety of colours but never blue) going missing. Suspicion falls on a plumber, John Horner, who was seemingly the only person in the suite occupied by the Countess of Morcar when her precious gem was stolen. Moreover, Horner has a previous conviction for robbery. He is arrested and seems destined for seven years of penal servitude.
Watson visits Holmes at Christmas time and finds him contemplating a battered old hat, brought to him by the commissionaire Peterson after it and a Christmas goose had been dropped by a man in a scuffle with some street ruffians. Peterson takes the goose home to eat it, but comes back later with the carbuncle. His wife has found it in the bird's crop.
Holmes cannot resist a good mystery, and he and Watson set out across the city to determine exactly how the stolen jewel wound up in a goose's crop