The Musgraves inhabit an old house, Penninghame Castle, in the north country. The old squire is still alive, though the estate is managed now by his daughter Mary, age 40. Fifteen years earlier in 1845, the eldest son John had fled with his lover Lilias after Lord Stanton was murdered; and John is believed by most people to be guilty of the crime. The old squire has one other son, Randolph, who believes himself the de facto heir, since John is a fugitive abroad.
We see much of the story through the eyes of Mary Musgrave. One day two little children with an Italian nurse are brought to her - they are John's children, Lilias and Nello. He writes that his wife Lilias is dead; and that he is very ill but still hopes to come home some day. The old squire, who won't ever speak of John, refuses to acknowledge the children.
The novel slowly unfolds various backstories connected to the events of 1845. There is another Lord Stanton now, Geoff, the much younger brother of the prior Lord Stanton. He believes there is a mystery connected to the murder of his brother, and sets out to solve it.
Meanwhile Randolph Musgrave is determined to get the little heir (whom he chooses to think illegitimate) out of the house and out of his way.
Biographical and other notes
The backstory to this novel is told in the short story The Lily and the Thorn, though with some plot differences. It is recommended that the short story be read before this novel - see the Related Story Lines entry below.
In some scenes in both the novel and the short story, there is a fairytale atmosphere which makes the story seem like a tale of olden days, rather than a story of the mid-nineteenth century. As noted elsewhere, it is possible that the original germ for this story came from one of the many old stories told to Margaret by her mother.