The narrator is sitting around a fireplace on Christmas Eve, in the middle of a story-telling session with a mixed group of friends and acquaintances. Someone has just finished telling a tale in which a ghost appears to a child, and another man named Douglas mentions that he knows a ghost story that involves two children and that has never been told to anyone but him before, for "dreadfulness." He says he is reluctant to tell it. The narrator eggs him on. Douglas agrees, but says he must send to town for the manuscript-written by his sister's governess, who was also a good friend of his. Douglas then leaves abruptly for bed, and the others speculate that he was in love with the author of the manuscript.
On Thursday the manuscript arrives, and Douglas gives a small prologue to it. (Douglas later wills the narrator the manuscript on his death, and the story we read in the following chapters is the narrator's transcription of it.) Douglas tells the circle of listeners that the manuscript's author was the youngest daughter of a poor country parson who came up to London to answer an advertisement for a governess. She meets her employer, a bold, pleasant, handsome, offhand, rich, and kind young man who treats the interview as if she is doing him a favor by applying for the job. He asks her to care for his nephew and niece, orphaned by the death of their parents in India and now living on his country estate in Bly. She will be helped by Mrs. Grose, the housekeeper, but class dictates that the governess will be "in supreme authority" there. The children's former governess had died. The girl, Flora was to be entirely under her care but the boy, Miles, would be sent to school when the next term began.
The governess hesitates as the job sounds lonely and grim, but finally accepts because of the high salary. Douglas here claims she succumbed to the seduction of the young man by accepting. He goes on to say that it had been difficult to fill the position, particularly as the young man's main condition was that the governess should never write or trouble him about anything having to do with the care of the children. All money would come from his solicitor. The young woman agrees, and never sees her employer again.
Douglas now begins to read, and his voice is so clear that it is like a rendering to the ear of the beauty of the author's handwriting.
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Chapters 1, 2, and 3
Chapters 4, 5, and 6
Chapters 7, 8, and 9
Chapters 10, 11, and 12
Chapters 13, 14, and 15
Chapters 16, 17, and 18
Chapters 19, 20, and 21
Chapters 22, 23, and 24