Content to stay on at Rose Cottage, with her Aunt's Hetty & Olivia, Sara makes friends with Jasper Dale, 'The Awkward Man' of Avonlea. In the meantime, the school board has decided to hold a 'magic lantern' show and use the proceeds for the school library fund. The man they hire to do this show is in actuality a confidence man, who Sara inadvertently helps skip town with the money. Sara wants to put on a show to replace the missing funds and asks the help of the shy Jasper, who is an inventor and owns a 'magic lantern'. Sara gives a heartfelt recitation of ""The Little Match Girl"", and she is forever known as ""The Story Girl"", in Avonlea.

A mischevious Sara and Felix sneak into grumpy old Alexander Abraham's house, on a dare, not knowing that he is ill and about to be quarantined. Avonlea busy-body, Rachel Lynde enters his house looking for his farm boy who has been skipping her Sunday School Class. All are quarantined together. Alexander is a woman hater, Rachel a 'do-gooder', and the house is an unmitigated mess. Rachel nurses Alexander through his illness, Felix too, when he falls ill. Sara helps cleans his house, and learns that there is more to life than just reading books all the time. Through the help of the children and Rachel Lynde, Alexander is no-longer a cranky old man, and somewhat less of a woman-hater. Mrs. Rachel, however, remains a 'do-gooder'.

Everyone in Avonlea knows everything about everyone. Exasperated, Marilla Cuthbert, ""creates"" a beau for the ladies of the sewing circle. To Marilla's distress, a traveling salesman with the same name she 'made up' shows up in town. Marilla faces Duncan McTavish and tells him the truth. Realizing the predicament she is in, Duncan helps Marilla stop all of the wagging tongues in Avonlea.

"Old Lady Lloyd" is believed to be a very wealthy woman, but she is actually living in poverty in her mansion. Sara befriends Miss Lloyd and wants to help her. Sylvia Gray, a friend of Olivia's visiting Avonlea, is the daughter of Miss Lloyd's former beau, who Miss Lloyd has never forgiven. Young Miss Gray has a magnificent singing voice, and Miss Lloyd, after a long conversation with Peg Bowen, walks through a thunder storm to get her cousin, with whom she has not spoken in years, to finance the young woman's career. The lesson is about forgiveness.

Bossy cousin Felicity is left in charge of all the children when Aunt Janet and Uncle Alec go away to celebrate their 15th wedding anniversary, and then Aunt Hetty decides she must go to Charlottetown to protect the farms "water rights". Felicity soon antagonizes the other children into misbehaving. Felix eats ""poison berries"", Sara smears Felicity's cherry pie all over Felicity's dress and even cuts off some of her ""perfect"" hair. A visit by the Governor's wife makes for confusion as to her identity. By the story's end, the children have all ""learned lessons"" and Sara become friends with the formerly unfriendly Felix and Felicity. My favourite quote: ""Felicity King is known throughout Avonlea for her cherry pies and sawdust pudding"" ~ Felix King

The children are enthralled went a missionary visits Avonlea. Sara is distressed that Peter, the hired boy, has ""no religion"" and sets about getting him to go to church. Peter comes down with influenza and the children come to realize how precious life is. Hetty and Olivia start to treat him less like hired help and more like family; Peter goes to school with the King children.

Janet King's sister, Abigail (Aunt 'Crabigail') Ward, is a fussy old maid, who lives in a spotlessly clean house. When her old beau, Malcolm McEwan comes back, rich, from the Yukon; he sets about wooing Abigail. At first she accepts, but the big man leaves such a mess, is so demonstrative, and buys her so many gifts that Abigail panics and returns his ring. Sara and Felicity are in raptures over the romance, and when they find out Malcolm is leaving town, they tell Abigail. She covers herself with Malcolm's gifts, and with Sara and Felicity holding on for dear life, races after the stage and begs Malcolm to return. Favourite quote: ""Let Mr. MacEwan drive the buggy home."" ~Sara to Abigail (after a wild buggy ride)

Back from their honeymoon, Malcolm suggests starting a family; Abigail says that she is too old for children, and they fuss quite a bit. Sara and Felicity find a newly orphaned baby and leave him on the McEwan's door step, hoping to smooth rough waters between the couple and give them something that they need. Enemies Rachel Lynde and Aunt Hetty both decide that they have a greater claim to the baby and both want him. In the end it is decided that the baby is better off with Malcolm and Abigail.

Felicity's pride is her downfall. She brags that she could make anyone popular, even poor sweet Clemmie Ray. She even makes a bet with snooty Sally Potts and her co-hort Jane Spry that Clemmie will shine at the Harvest Ball.Alec King's principals are put to the test when a visiting politician, whom he supports, tries to ""buy"" his vote by offering to select Felicity's costume as the 'Best' at the Harvest Ball. Clemmie is Clemmie and is not popular at the ball, and Felicity, because of her fathers decision, does not win 'Best Costume' or her bet with Sally Potts. The children, however, learn about the value of friendship and being true to oneself.

With Aunt Hetty as the Avonlea schoolmistress, Felix is feeling like the ""dunce"" that she tells him he is. With the help of Peg Bowen, the Witch of Avonlea and a ""magic stone"" Felix hopes to win the spelling bee, but then he loses the stone. His sister, Felicity sees her dream of becoming the Spelling Champion vanish, when it is Felix who wins. Felix learns that he always had the ability to win and he only needed a bit of self-confidence, just as the wise Peg Bowen wanted him to learn. Favourite quote: ""Cows and sows give birth as well, but to my knowledge, this doesn't qualify them for Teachers' College."" ~ Hetty King

aka ""The Blue Chest of Arabella King"" Arabella King, a distant relative, was jilted at the altar, and left all of her wedding finery in a chest which sits in the King Farm kitchen for years. The curious Sara and her cousins Felix and Felicity try to persuade the adults to open the chest. Upon the notification of Arabella's death, they are free to open the chest.Aunt Olivia has begun working for the newspaper and finds a story in the contents of the chest. With the help of Sara and Jasper Dale, Olivia gets her story and solves an old mystery. Jasper and Olivia also discover they share a mutual interest in one another.

Blair Stanley, Sara's father, has been acquitted of fraud and he wants Sara to come home to Montreal. He returns to the island and comes up against Hetty King, who refuses to let Sara go. Aunt Hetty resents Blair Stanley 'taking' her younger sister Ruth away from the family and then 'letting' her die, because of their fast city life-style. Sara in heartbroken, afraid of losing the family she has grown to love and losing her fathers love, because she wants to stay in Avonlea. Trying to reason with Hetty and Blair leaves her further frustrated, and so Sara runs away and hides, hoping to unite the families. Instead it sparks more antagonism. When she is finally found, Sara defiantly argues with Blair, and not paying attention to where she is walking, loses her footing and falls from the top loft of the barn. Hetty & Blair, frightened of almost losing Sara, decide to talk over their differences and call a truce to their fighting. Sara is allowed to stay on the island.