Young Duncan McHugh blames himself for his mother's poverty and depression. After an embarrassing incident at school, Emily befriends Duncan and brings him to New Moon. But when Aunt Elizabeth finds out who he is she sends him packing. His mother Alma and Aunt Elizabeth had both been in love with the same man, but he married Alma. Emily, Ilse, Perry and Teddy also defy an order not to go into town to watch the hanging of a murderer.

Oliver, Emily's cousin, announces that New Moon actually belongs to his father. His girlfriend Maida is pregnant and loses her job and is left penniless. Emily, Ilse, Perry and Teddy, get her settled in the Disappointed House and end up helping to deliver her baby. Maida leaves town, and Oliver takes responsibility for his child.

Emily is raised by her father who encourages her to always follow her heart and dreams. But when her father dies leaving Emily all alone she has to be raised by one of her relatives, none of which want her. She hides under the table as they draw lots to see who will have to raise her. Aunt Elizabeth is drawn and Emily is sent to live with her, Aunt Laura and Cousin Jimmy at New Moon.

Emily decides to find out the truth about Ilse's mother. Cousin Jimmy and Perry, along with Ilse, break into a warehouse trying to find out if she sailed away or stayed in Blair Water. During a faver the truth is finally reveled.

Emily moves to New Moon and Aunt Elizabeth forbids her to read or write fiction. Pandora, Emily's cat, is left on the side of the road by Aunt Elizabeth. After finding some old 'Letter Bills' in the attic, Emily uses the back of them to write letters to her father.

Emily discovers the ""Disappointed House"" which looks out over the seashore. She also gets a surprise when Teddy kisses her. A carpenter was building it for his wife-to-be when she called off the wedding days before it was set to take place. Both now dead, Emily must help the ghosts to see the truth so that they can finally be together. In the process revealing one of Aunt Laura's secrets. Emily also meets Perry Miller, who becomes the new New Moon chore boy.

Aunt Elizabeth find Emily's treasured 'Letter Bills' hidden in the attic. Laura announces her engagement to the rest of New Moon.

Miss Brownell leaves her post as teacher and marries the school inspector. Her replacement is Mr Carpenter, a once university professor. He encourages the children to find their own talents, the only problem is that he drinks. Emily, Perry, Cousin Jimmy and Aunt Laura have to get Mr Carpenter cleaned up for his final evaluation after he staggers to New Moon drunk.

When a racoon savages Emily's cat Pandora, Aunt Laura takes the cat to Dr Burnley where they share a bitter-sweet moment. When Ian Bowles asks Laura to marry him, she says yes, but not with her whole heart.

Emily is horrified when Aunt Elizabeth informs her that she must attend school. After a dreadful first day of being teased by the other students and meeting the mean teacher Miss Brownell, she meets Ilse Burnley and they become friends.

While searching through the attic Emily comes across her mother's, Juliet, doll. Aunt Laura restores it for Emily. Then Aunt Laura meets Ian Bowles and falls in love with him...until she finds out the truth about him which sends her back home in tears.

Emily and Ilse are curous about who Lofty John exactly is and go searching on his property to find out more. After catching Emily he forces her to eat a 'poison' apple and sends her home. Despite trying her best to be brave she prays to her father who is on the road to heaven.

Ilse Burnley wants to learn about her dead mother because her father never talks about her. Emily, whose own father is dead, feels sympathy for her and wants to help find some information. While visiting her Great Aunts they tell her the tales about what has happened to Ilse's mother. After running away Emily snares her foot in a rabbit snare and is rescued by her Cousin Dean Priest (2nd cousin, twice removed).

New Moon suffers tragedy with the death of Aunt Elizabeth who went missing at sea. The family then discovers that Elizabeth had borrowed money from Scottish relatives and that New Moon now belongs to them.

Still recovering from the loss of Elizabeth the family begins to fall apart in some ways. Jimmy confesses about how much he did love Elizabeth, and while trying to hide from her own fears, Laura becomes addicted to laudanum. Emily tries her best to convince the Scottish relatives that she will give them everything she owns in exchange for New Moon, only to receive a reply saying the they are coming to P.E.I. to claim it.

Emily begins to realise that despite how tough Aunt Elizabeth was, a part of her truly loved her and missed her now. Laura increases her intake of laudanum, then suffers inertia and stays in bed. Uncle Malcolm replies to Emily and says that he will not take the diamond she found as payment (not enough) and that they are coming to claim what is now theirs.

New Moon is on tender hooks after Aunt Isabel Murray arrives to 'take over'. Emily is horrified when Isabel tells her sher will no longer be allowed to attend school and that in place of it she will have to earn money. Next she tells Cousin Jimmy to kill one of his own cows for food and takes the household keys off Laura.

Teddy falls down an embankment while playing hide and seek with Emily and Ilse. The girls try to reach him, but before they can Mad Man Morrison picks up Teddy and takes him to Dr Burnley. With this in mind, Teddy's possesive mother then plots to to convince Teddy that Emily and Mad Man Morrison are romantically involved.

When Aunt Laura's addiction to laudanum worses, Isabel takes the step of putting her in an asylum without asking anyone else. Meanwhile, New Moon is up for sale and Stuart is planning on buying it. Emily doesn't want Laura in the asylum and goes to get help via Jimmy, Dr Burnley and Uncle Malcolm.

As Emily and Ilse continue to grow older, the adults are faced with some questions that the girls will stop at nothing to get answers for: The facts of life. Meanwhile, Ilse's father, Dr Burnley has accepted a position at Massachusetts' General Hospital. Not wanting to leave, Ilse and Emily plan to run away only to have Uncle Malcolm ruin it by getting ill to the point he is close to death. Dr Burnley saves the day and begins to redeem himself in the eyes of Blair Water residents.

The Devil is in Blair Water, or so says the Reverend Nicholas Pitch who has arrived in Blair Water to rid the town of him. Hysteria immediately follows as the townspeople are suspicious of everything and blame the Devil. Meanwhile, the younger townspeople start to ask questions about the Devil. Hysteria continues in what can be likened to the Salem witch trials. In all this it is Laura who become calm (the Devil has of course left her).

The attention of this episode is based on that old faithful story of love. The girls desperately want to ensure that marry and pray to St. Agnes for help. However, being the age they are, it is Cousin Jimmy who gets the answer when he falls for Eve Kinch. From a poor family, they seek shelter at New Moon. All goes well between the two until Eve's father, Abner finds out and loses his temper. Then the revelation comes, Eve is pregnant.

Despite disappoval from Eve's father, Abner, Jimmy plans to give Eve everything that she wants. Emily causes more problems when she gets the idea Eve is a Saint and wants it is be official by getting people to sign a petition. Abner is determined to keep the two lovers apart and finds Jimmy and Eve when they secretly rendezvous. After a struggle Abner Kinch is dead. One question remains, who killed him: Eve or Jimmy? Jimmy risks everything for the woman he loves…

Poor Baby Ollie is again being handed about after he is left on the Murray's doorstep. Hoping to reunite Ollie with Maida Flynn, his mother, the children devise a plan. However their plans are not to be as Perry's Aunt Thom and new ‘friend' the Madame Marlena shatter the plans.

Isabel, knowing full well of Emily's plans, forbids her to enter into the ""Island Romance Contest"". Having written the story of ""Isabella of the Highland"" Emily reluctantly puts it away only for Ilse to find and submit. When it wins first prize Isabel wants Emily to renounce the award and takes both her and Aunt Laura to Charlottetown to do it. Ian Bowles makes a return to the series with a pregnant Margaux Lavoie. Laura must face the truth as the lies and deceit become too much