According to Mary, in December 1878, her father had telegraphed her upon his safe return from India and requested her to meet him at the Langham Hotel in London. When Mary arrived at the hotel, she was told her father had gone out the previous night and had not returned. Despite all efforts, no trace was ever found of him. Mary contacted her father's only friend who was in the same military unit and had since retired to England, one Major John Sholto, but he denied knowing her father had returned. The second mystery is that she has received six pearls in the mail from an unnamed money-giver, one per year since 1882, after answering an unnamed newspaper question asking for her. With the last pearl, she received a letter saying that she has been wronged and asking for a meeting. Holmes takes the case and soon discovers that Major Sholto had died in 1882 and that

within a short period, Mary began to receive the pearls, suggesting a connection. The only clue Mary can give Holmes is a map of a very secure place found in her father's desk with the names of Jonathan Small, Mahomet Singh, Abdullah Khan and Do Akbar.

Holmes, Watson, and Mary meet Thaddeus Sholto, the son of the late Major Sholto and the anonymous sender of the pearls. Thaddeus confirms the Major had seen Mary's father the night he died; they had arranged a meeting to divide an incredibly valuable treasure Sholto had brought home from India. While arguing over the treasure, Captain Morstan suffered a heart attack. Not wanting to bring attention to the object of the quarrel and also worried that the circumstances would suggest that he had killed Morstan in an argument, especially since Morstan's head struck the corner of 

the chest as he fell. Sholto threw out the body and hid the treasure. However, Sholto himself suffered from poor health. His health got worse when he received a letter from India in early 1882. Dying, he called his two sons and confessed Morstan's death; he was about to tell people about the location of the treasure when he suddenly cried, "Keep him out!" before dying. The confused sons saw a face in the window, but the only trace was a single footstep in the dirt. On their father's body is a note reading "The Sign of the Four". Both brothers argued over whether legacy should be left to Mary, and Thaddeus left his brother Bartholomew, taking a chaplet and sending its pearls to her. The reason he sent the letter is that Bartholomew has found the treasure and possibly Thaddeus and Mary might stand up to him for its division.