Gus Pike is working hard at school and taking odd jobs around town when Captain Ezekiel Crane, the reclusive lighthouse keeper, offers him a job and a place to stay. Rachel Lynde is convinced that the island is being over run by bootleggers. The children believe they see a Ghost Ship near the lighthouse. Abe Pike, former first mate for Captain Crane, arrives in Avonlea, having escaped from prison and claims Gus as his son. Abe fights with Ezekiel and falls into the ocean, as the towns people storm the light house looking for bootleggers.

aka ""Another Point of View"" Alec is elected to the school board, and Hetty feels that she is being unfairly criticized so she quits her job as schoolmistress in Avonlea. Her replacement is Alistair Dimple, an impoverished actor, pretending to be a teacher. Alistair inspires the students to learn by doing role-playing and, in turn, inspires Hefty to write a book about the island. Alec finds out Dimples ""identity"", but keeps quiet as Avonlea school battles it out for the History Championship competition against rival Carmody.

It is a dark and stormy night when Gus falls under the spell of beautiful Amanda Stone, much to Felicity's chagrin. Robert Rutherford arrives in Avonlea, on Amanda's very heels, and claims the gems Amanda left in safe keeping with Gus are stolen. Gus, smitten with Amanda, refuses to believe Rutherford's claims, however Felicity smells a rat in fine french perfume. The town's people hear about Gus's gems and begin to treat him differently. Then a series of events causes Gus and Felix to be thrown in jail and Gus sets out to find the truth.

The Kings find a man in thier barn and give him work, but is he all that he seems?

Cecily comes home from the sanitarium with such high hopes, but Janet and Alec are afraid that she might have a relapse and treat her as if she is still ill. The towns people are worried and refuse to let Cecily return to school. Aunt Eliza convinces Alec and Janet that treating Cecily as if she is well, is they only way that everyone's life can get back to normal. Felicity is dealing with her choice to leave medical school, and eagerly awaiting Gus's return; with plans to go ahead with their marriage. Felicity is devastated when she learns that Gus's ship has gone down, with all hands lost at sea. Gus is presumed dead.

The Dominion Day picnic finds Felix in jeopardy of losing Izzy's friendship and Jasper trying to tell Olivia he has been offered a teaching position in England. The boys in town are all making eyes at Hannah Hubble while the girls look on with growing irritaion.

Davy sees a 'mermaid' in a traveling show and is smitten. He has his head full of dreams and fantasies. Rachel is improving since her stroke and is learning to enjoy the ""little things"" in life. The traveling show tries to swindle the town out of it's share of profits; but Davy discovers what is going on and puts a stop to it.

Izzy is at loose ends. Felix has betrayed her, and her father is involved with his new bride. After writing to her mother's sister, Izzy is surprised when her aunt arrives in Avonlea. The woman dazzles Izzy with tales of her glamourous life, and Izzy decides to return to Boston with her Aunt Lillian. Lillian is exposed as a woman in financial ruin, and Felix makes a heartfelt plea to Izzy to stay in Avonlea with him. As home and love are strong ties, Izzy decides to stay in Avonlea.