A young boy named Nicholas refuses to eat his breakfast of bread-and-milk because, he claims, there is a frog in it. The aunt he lives with (who is his cousins’ aunt, but insists that she is Nicholas’s aunt, too) demands that he stop making up ridiculous tales because it is impossible for a frog to be in his breakfast. However, Nicholas has himself put the frog in his breakfast bowl and is pleased to point out that the aunt was wrong when she said it was impossible. To punish Nicholas for refusing to eat his breakfast and for putting a frog in his food, the aunt sends the other children (Nicholas’s boy-cousin, girl-cousin, and younger brother) on a trip to Jagborough while Nicholas is to stay home. This is a form of punishment that the aunt favors. When the children don’t follow her rules, she comes up with fun activities to exclude the wrongdoer from.
The aunt expects Nicholas to be sad about missing the trip, but he doesn’t seem to be. Instead, when the girl-cousin scrapes her knee right before they depart and cries, Nicholas happily points out to the aunt that the girl cried very loudly. Nicholas also points out that Bobby will not enjoy the trip because his boots are too tight. The aunt wonders why Bobby didn’t tell her about this, and Nicholas replies that Bobby told her twice, but that she often does not listen when the children tell her “important things.”
The aunt adds to Nicholas’s punishment, saying that he is to stay out of the gooseberry garden. Seeing the stubborn expression on Nicholas’s face, the aunt assumes that he plans to disobey her just for the sake of it. Even though she has other things to do, the aunt stations herself in the front garden with some menial gardening work just so she can catch Nicholas if he tries to sneak into the gooseberry garden.
Nicholas feigns an interest in the gooseberry garden by walking past the doors leading into it a couple of times. He only wants to ensure that his aunt will stand guard in the front garden, leaving him free to put his real plan into action. When he is sure that she is out of his way, he rushes into the library and finds the key to the lumber room. Only adults are allowed to enter this room, and Nicholas has been working for a while on a plan to go inside and explore it.
When he enters the lumber room, Nicholas finds it to be as magical as he had hoped. While the rest of the aunt’s house is largely unexciting, the lumber room is filled with fascinating curiosities like a tapestry depicting a hunting scene in which a man has shot an arrow into a stag but is unaware of four approaching wolves. Nicholas loses himself in the story the tapestry depicts, wondering whether the man and his two dogs will be able to escape the wolves, and if there are perhaps more than four wolves. He also finds many other thrilling objects in the lumber room, like candlesticks shaped like twisted snakes, and a teapot shaped like a duck.
Suddenly, Nicholas hears his aunt calling his name, asking him to come out of the gooseberry garden because she can see him there. Nicholas smiles to himself, because he knows she is lying. Soon after, he hears his aunt scream and call for someone to hurry to her. Nicholas locks up the lumber room and goes to the front garden to investigate. His aunt calls to him from the gooseberry garden and says that she has fallen into the rain-water tank. She asks him to bring her a ladder so she can climb out, but Nicholas responds by saying that he was told to stay out of the gooseberry garden. The aunt hastily tells him that she has changed her mind and that he can now enter it. To this, Nicholas replies that she doesn’t sound like his aunt, and that he suspects the “Evil One” is in the water tank, not his aunt. He asks if there will be strawberry jam for tea, and when the aunt says there will be, Nicholas triumphantly declares that this is evidence that it is indeed the Evil One in the water tank pretending to be his aunt. When the children had asked the aunt for strawberry jam the previous day, she’d said there wasn’t any. So clearly, Nicholas says, she couldn’t have known there were four jars of it in the store cupboard. Nicholas had looked, so he knew, and the Evil One in the water tank knew, but the aunt didn’t know. The Evil One has given himself away, Nicholas says, and walks away without helping the aunt out of the water tank. She is finally rescued 35 minutes later by a kitchen maid.
Later that day, teatime is quiet. The aunt is upset after being stuck in the water tank. The children did not enjoy their trip to Jagborough because the tide was high and no one got to play in the sand, and Bobby is in a bad mood because of his tight boots. Nicholas is quiet, too, imagining a conclusion to the story on the tapestry, wondering if the hunter and his dogs would manage to escape if they left the stag to the wolves.
