Anne comes into conflict with Marilla when her amethyst brooch goes missing. Although Anne is innocent, she invents a dramatic "confession" story to be allowed to attend the long-awaited school picnic – but Marilla forbids her from participating as punishment. Only when Marilla discovers the brooch on her own shawl does she realize her mistake and finally permits Anne to go to the picnic, where Anne enthusiastically gathers new experiences.

Anne’s first school day starts promisingly: she impresses with her lively manner, excels in class, and gains recognition from her classmates. But the mood shifts when Gilbert Blythe, a self-assured classmate, teases her about her red hair ("Carrots!"). Anne reacts impulsively and smashes a slate over his head, after which the teacher humiliates her in front of the class. Despite Gilbert’s apology, Anne refuses to return and declares she will never attend school again as long as Gilbert is there.

Meanwhile, her friendship with Diana deepens, as Diana supports her despite the escapades. Marilla and Matthew are torn between concern over Anne’s impulsive temper and understanding of her pride. The episode ends with Anne’s determination to assert her right to respect – even if it means risking her education.