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After our narrator Dr. John Watson gets married (to Mary Morstan, in Conan Doyle's second Sherlock Holmes novel, The Sign of Four) he doesn't see Holmes quite as often as he used to. As Watson sets up a happy home with his wife, Holmes remains as weird as ever, hanging around their old place in Baker Street and alternating between cocaine and criminal cases.

Watson happens to be passing his former apartment on the walk back from his medical practice one evening, and decides to stop in to see his old pal Holmes. The two bat jokes back and forth about Holmes's deductive ability. Holmes finally comes out and asks if Watson can even recall the number of stairs that lead up to the 221B Baker Street apartment, and Watson admits that he cannot. "Ah ha!" crows Holmes: proof that, while Watson sees the same things that Holmes does, he fails to observe them.

A new client arrives to meet Holmes and, after trying to hide his identity for about two seconds, comes clean: he is Wilhelm Gottsreich Sigismond von Ormstein, Grand Duke of Cassel-Felstein and hereditary King of Bohemia (whoa, that's a lot of letters for one name! Bohemia, by the way, is now part of the modern-day Czech Republic). His problem is that he's about to marry the daughter of the King of Scandinavia. The thing is, though, she's from a family with very strict morals, and she wouldn't be pleased to know that he had a serious affair with another woman before their engagement.

This woman is Irene Adler - who lives on in Holmes's memory as the woman. She's a singer who met the King in Warsaw, where they subsequently had a bit of a fling. Unfortunately, the King allowed himself to be photographed with Adler, and she has the picture. The King wants Holmes to recover the incriminating photo. Holmes agrees.