Connie Blair and her twin, Kit visit their Aunt Helen and Uncle Peter Ridgeway in Newport, Rhode Island. The intrigue begins their first night of vacation, while sailing with their cousins, Tom and Randy,
they see a light in an abandoned mansion called, Eagle Rock.

Kit and Connie investigate the mansion several times with their cousins. On their first visit the twins smell perfume. The twins make a nocturnal visit to Eagle Rock with their cousins when they see someone on a balcony. They approach the mansion and hear violin music which stops suddenly. Connie and Tom see a ghost in the stairway.

The sisters investigate the mansion with Tom and his friend, Mark Eastham, who wants to pursue a music career but his guardian, Adolph Eastham, wants him to study engineering. Connie smells a differently scented perfume and discovers new packing crates in an underground storeroom and a cave that opens out onto the bay. Later, Connie finds Kit knocked unconscious. Their car won't start and Mr. Meredith, a charter boatman, gives them a lift in his boat. He seems disturbed that they have been exploring Eagle Rock.

Connie explores Eagle Rock alone she learns the identity of the ghost and is locked in the underground chamber as high tide is coming; she quickly swims out of the cave. She deduces that smugglers are using the cave and the young people stakeout the mansion. Connie traps the smuggler by taking his rowboat and leaving him in the cave while a high tide is coming in. She fibs about the incident so Mark can collect the reward money and study music. Mark refuses the money and tells his guardian the truth, who relents and agrees to lend him the money for music school.