Anne returns after her success at Queen's Academy to Green Gables, where she spends the summer doing housework. One morning, Matthew suffers a fatal heart attack, plunging the family into deep grief. At the same time, Marilla learns from an eye doctor that she will go blind within half a year without treatment. The financial situation worsens when the Abbey Bank collapses and the Cuthberts lose their savings.

Marilla decides that she must sell Green Gables, as she cannot manage the farm alone. Anne reacts decisively: she gives up her Redmond studies and the Avery scholarship to instead take a teaching position in Carmody and care for Marilla. This decision is eased by an unexpected turn of events: Gilbert Blythe gives up his commitment to the Avonlea school and arranges for the position to go to Anne, allowing her to stay at home. He himself takes a position in the more distant White Sands.

The episode culminates in the reconciliation between Anne and Gilbert on the shore of the "Lake of Shining Waters." Anne thanks him for his selfless act, and they finally make peace. The story ends with Anne's optimism: despite an uncertain future, she trusts that "the best" is waiting around the next bend.