As the story opens, Nicholas finds himself suffering the punitive measures of a self-appointed and authoritarian aunt. He is denied the supposed privilege of going to the sands of Jagborough because he refused to eat his bread-and-milk in a bowl, which contains a frog.
Scolded for speaking nonsense as there could not be a frog in his dish, Nicholas insists that there is, indeed, a frog, since he has put it there himself. Then Nicholas is scolded further for his audacity in taking a frog from the garden; however, he perceives only the older person's misjudgment in arguing that there could be no such creature in his bread and milk.
Deprived of the supposedly festive privilege of the beach, Nicholas informs his aunt that his cousin Bobby will not enjoy himself since his boots are too tight and his other cousin has scraped her knee. She scolds him for not informing her of Bobby's boots and issues an order: "You are not to go into the gooseberry garden."
But since she is convinced that he will do so, Nicholas manoeuvres his way toward one of the garden doors, knowing that the aunt is watching. He then doubles back and goes into the library, where he takes down the key to the lumber room.
Once inside the lumber room, lit only by a high window, Nicholas is met with a world that stirs his imagination. A piece of framed tapestry becomes a living story of a hunter with a stag he has shot with an arrow, being pursued by several wolves; a teapot is delightful, a book of birds resplendent, and a carved sandalwood box lovely.
Suddenly, Nicholas hears his aunt’s shrill voice calling him in the gooseberry garden. He smiles to himself.
Soon the angry cries give way to a shriek and a cry for help. Locking the lumber room, Nicholas enters the front garden, calling out to his aunt. She responds, informing him that she has fallen into the empty rain-water tank, and she asks Nicholas to fetch the small ladder under the cherry tree.
Nicholas quickly replies, “I was told I wasn’t to go into the gooseberry garden.”
The aunt countermands, “Don’t talk nonsense. Go and fetch the ladder.”
Still Nicholas objects, saying her voice does not sound like his aunt’s. Vehemently, the voice from the tank orders the ladder. When Nicholas asks if there will be strawberry jam for tea and the aunt assures him that there will be, Nicholas argues that the voice cannot be his aunt’s, who thought yesterday there was no jam.
Nicholas walks away, but a kitchen maid eventually sees the aunt’s plight and rescues her.
At teatime that evening, there is a threatening silence. The children return from Jagborough, disgruntled that the tide was too high to have enjoyed the sand. Bobby is yet in a bad temper and the aunt sits in “frozen muteness.”
Also silent, Nick imagines that the huntsman on the tapestry will escape with his dog while the wolves devour the deer.