On Christmas Eve, a police commissioner intervenes in a street altercation during which a man loses his hat and his goose. The policeman leaves the hat with Holmes and takes the bird home for dinner. However, the following day he returns as his wife discovered a huge diamond inside the bird. The jewel turns out to be the blue carbuncle, an infamous priceless stone, stolen from its owner’s hotel room while a plumber was fixing a loose grate. The robbery was discovered by the hotel attendant who calls the police and reports his suspicions about the plumber. The worker has a criminal record, so he is quickly arrested despite the lack of evidence.

When the jewel is brought to him, Holmes decides to discover how a stolen stone could end up inside a goose. He puts out an ad in the newspaper about the lost possessions and soon a man comes to claim them. He has no knowledge of the jewel but tells the detective he got the bird from a tavern owner. Holmes and Watson then visit the tavern and eventually follow leads to a market stall and intercept another man interested in discovering the whereabouts of the goose.