Despite its dilapidated condition, best friends and recent college graduates Martha Dobie and Karen Wright decide to open a girl's boarding school at an abandoned farmhouse in Lancet, Massachussetts, the farmhouse bequeathed to Karen. They are assisted in fixing the house up by a local doctor, Joe Cardin, who quickly falls for Karen, and she for him. Karen and Joe soon become engaged. The women are assisted in getting the school off the ground by local dowager, Amelia Tilford, who is looking for a new school to which to send her granddaughter, Mary. Mrs. Tilford's endorsement carries much weight in the community. They are also given the unwanted assistance - for a fee - of Martha's pretentious, self-serving and bossy Aunt Lily Mortar, a stage actress, her services as an elocution teacher. Beyond Mrs. Mortar, problems arise at the school when trouble-making student Mary, who feels persecuted by her teachers, decides to exact revenge. She tells her grandmother of impropriety between Joe and Martha late one evening in Martha's bedroom. Mary's story includes some half truths and exaggerated truths, the truths which makes the crux of her story more plausible. One of those half truths, which Mary does not fully realize, is that Martha secretly does love Joe. The reputation and livelihood of Martha, Karen and Joe hang in the balance of Mary's lies.