Gabriel Cochrane shows up in Candleford and he is the former owner of a large iron foundry. After his business went bust and his wife died, Gabriel ended up both penniless and homeless. Dorcas ends up offering him a job as a blacksmith, and a place to live above the forge. Gabriel is determined to regain his wealth and position and bring down Steerforth who he believes is responsible for all of his problems. Emma is happy when she receives a postal order from Robert who is working in Oxford. After sending Edmund to cash it he ends up being robbed and is forced to break the news to Emma about what has happened. After Emma learns the truth behind the robbery, she is faced with a difficult dilemma. Pearl Pratt is happy to have her beloved sister Ruby back home following the breakdown of her relationship.
Daniel decides that the newspaper is going to launch a poetry competition which sends the residents of Lark Rise and Candleford into a frenzy as everyone is determined to win. After Laura purchases some second-hand poetry books she finds out that they once belonged to Gabriel's late wife. Inside she finds a letter from Liza to her lover, expressing regret at having married Gabriel. Laura isn't sure what she should do next with the letter after showing it to Dorcas. Queenie is upset that the lace that she makes is no longer in demand. Dorcas decides that the letter should be left for Gabriel to find. Everyone is surprised when the winner of the competition is announced.
Thomas is over the moon after when he is given the job of organising the church bazaar. His happiness is soon dampened though when the vicar becomes ill and curate Reverend Marley takes over. Thomas feels resentment towards Marley and after he finds a snake in the undergrowth while out on his postal rounds, he sees it as a sign that the devil is indeed among them. Laura finds out that Gabriel has found his dead wife's letter.
The fair arrives in town and there is much celebration. Alf ends up being the champion in the shin-kicking contest whilst Queenie wins a whole pig. Twister can't wait for the meals to come so after Queenie decides to share the pig with Lark Rise without telling him and the pig gets better treatment than him he begins to feel hard done by.
Daniel finds himself at odds with the captain of a neighbouring cricket team, who he believes he cheated in their last match. Dorcas thinks that he should put matters to rest by challenging his rival to a re-match. Laura discovers the old, neglected graves of an unknown couple as she makes her rounds and becomes determined to uncover their story.
Caroline Arless is released from debtor's prison and returns home but she doesn't get the warm welcome she was hoping for. Minnie learns that Alf can't think about marriage while his siblings need him and while his mother is still getting herself into trouble. Thomas pay his sisters' a visit and finds a cold and distant Margaret.