Anne Shirley has now been married to Gilbert Blythe for 15 years, and the couple have six children: Jim, Walter, Nan, Di, Shirley, and Rilla.

After a trip in Europe, Anne discovers that John Meredith, the new minister and a widower with four young children–Jerry, Faith, Una and Carl–has arrived in the village. With no mother, a very dreamy, too-lenient father and an old, bitter, and partially-deaf aunt to take care of them, the children are not properly brought up.

The children are considered very wild and unruly in nature. Because of this, they have many scrapes leading to much gossip, risking their father’s job. However, these children are kind-hearted in nature and have become good friends with Anne’s children.

Una helps save an orphaned girl, Mary Vance, from starvation and finds a home for her with Miss Cornelia and her husband, Marshall Elliot.

The Merediths, Blythes and Mary Vance like to play in a hollow called Rainbow Valley, which becomes a gathering place for the children in the book.

Meanwhile, John Meredith is also having a second romance, with Rosemary West. Objections from Rosemary’s sister, Ellen, about a promise they made years ago, have obstructed them. Finally the problem is resolved by the children, who find Ellen’s long forgotten love, and the book has a happy ending with a double marriage.