At the start of the story we find the newly-married Watson returning on an impulse to his old Baker Street quarters to see how Holmes is doing. He finds him with a royal client, the King of Bohemia, who requests Holmes’s help in his private affairs. He is engaged to be married to a princess, but a former lover of his, the soprano singer Irene Adler, has vowed to wreck the marriage. Irene threatens to expose the King’s former affair with her by means of a compromising photograph. The King wants Holmes to try and get this photograph away from her.
Holmes disguises himself as a groom and goes to the neighbourhood where Irene lives, to get information. He learns that Irene is now seeing someone else. He arrives, coincidentally, when the two of them are about too be married, and he is roped into attending the wedding as a witness. This marraige increases the urgency of his quest to secure the photograph, as Irene and her new husband are now about to leave the country.
For his next move, Holmes disguises himself as a clergyman and also enlists Watson’s help. He goes to Irene’s house in his disguise and is, seemingly, caught up in an altercation in the street outside, leaving him wounded. Irene has him brought into her house so that she can tend to him. At this point Watson, having been instructed by Holmes, throws a smoke-bomb into the room, and the people outside start crying fire. Holmes and Watson leave and Holmes explains what has just happened. He arranged the scene outside the house and only pretended to be wounded, in order to gain entry to Irene’s house. He further organised the false fire alarm to see where she would go in an emergency. He knows that the photograph is one of her most important possessions and that in an emergency she would rush to it first. Holmes has thus discovered where in the house the photograph is hidden, and he resolves to return next day and take it for himself when Irene is not about. During their walk home, a strange youth passes by and wishes Holmes goodnight. He is surprised by this.
Next morning, on arriving at Irene's house, Holmes, Watson, and the King find that she has already left, taking the photograph with her. Holmes is stunned at her ingenuity. She has left a note explaining everything. Having been previously warned that the King might hire someone to get the photograph from her, she guessed that Holmes was acting on the King’s behalf and had deliberately gained entry to her house the night before in his disguise as a clergyman. Realising this, she put on her own disguise as a young man and tracked Holmes and Watson back to Baker Street before leaving the country. Although she has taken the incriminating photograph, she declares that she will not use it against the King after all, as she now has married a better person than he. The King is relieved but Holmes is mortified, although also full of admiration at the way that Irene has outwitted him. Watson makes Holmes's admiration for her quite clear at the very start of the tale:
To Sherlock Holmes she is always the woman. I have seldom heard him mention her under any other name. In his eyes she eclipses and predominates the whole of her sex.
To Holmes, then, Irene appears unique; in his eyes she holds a special place among women in her rare combination of beauty, passion, intelligence and resolve.