The story opens in Baker Street, where Holmes and Watson examine a walking stick left behind by a visitor named Dr. James Mortimer. Holmes invites Watson to deduce what he can from the stick alone, then reveals his own, far more detailed analysis — identifying the owner as a country doctor who travels on foot and owns a dog. It is a masterclass in observation: Holmes reads biography from an object most people would overlook.

This opening scene establishes the central dynamic of the novel. Watson is intelligent and observant, but Holmes operates on a different level entirely. When Mortimer arrives and compliments Holmes, he pointedly says he ranks Holmes as the second highest expert in Europe — the first being a French criminologist. Holmes's amusement at the slight is itself a small character revelation.

The scene sets up the book's core theme: appearances deceive, but careful, disciplined reasoning cuts through illusion. Almost every mystery that follows — the legend, the hound, the identity of the killer — will hinge on the difference between what things seem and what they actually are.