Entering the office and showing Holmes and Watson an 18th century manuscript, Dr. James Mortimer tells the myth of Hugo Baskerville. Hugo captured and imprisoned a young country girl at his estate in Devonshire. He then became the victim of a hound of hell as he chased her along the lonesome moors late one night. Ever since that day, James Mortimer reports, the Baskerville family has been haunted by a mysterious and supernatural black hound. The recent death of Sir Charles Baskerville has brought back suspicions and fears. The next of kin, Holmes and Watson find out, has arrived in London to take up his post at Baskerville Hall, but he has already been intimidated by an anonymous warning note and the theft of a shoe.
The duo quickly discovers that Sir Henry Baskerville is being followed in London by a mysterious bearded stranger, and they speculate as to whether the mystery man is a friend or an enemy. Holmes, however, says he is too busy in London to accompany Mortimer and Sir Henry to Devonshire to investigate the bottom of the case, so he sends Dr. Watson to be his eyes and ears, asking him to report back regularly.
Arriving in Devonshire, Watson discovers a state of emergency, with armed guards on the lookout for an escaped prisoner wandering the moors. He meets potential suspects in Mr. Barrymore and Mrs. Barrymore, Mr. Jack Stapleton and his sister Beryl, Baskerville neighbours.
A series of mysteries happen: Barrymore is caught lurking around the mansion at night; Watson spies a lonely stranger watching the moors; and the doctor hears what sounds like a dog's howling. Beryl Stapleton warns Watson and tells him to go back to London immediately and Watson learns of a secret meeting between Sir Charles and a local woman named Laura Lyons on the night of his...