With Bates's trial pending, Christmas at Downton Abbey is rather grim. The news that Mrs. Hughes, Mrs. O'Brien, and Lord Grantham himself must testify on behalf of the prosecution casts an even darker shadow on the household. A new maid arrives, Ms. Shore, and though she seems to have good intentions, she interferes more than she assists. Between guffawing at the planchette game found by Daisy and commenting that Daisy works harder than her station suggests, Mrs. Patmore soon tires of the new addition.
Mary has a difficult time getting Sir Richard to enjoy the holiday festivities; he remarks disdainfully about the servants' Christmas lunch and again during a game of Charades. What irritates him the most, however, is Matthew and Mary's continuing friendship. Mary is upset that Matthew will be leaving for a time to visit Lavinia's father, who is ill.
Two new visitors grace the household before the New Year: A former beaux of Edith's, Sir Anthony Strallan and a former beaux of Rosamund, Lord Hepworth. Edith tries unsuccessfully to re-woo Sir Strallan, but he makes it plain to her that their age difference is unsuitable. Meanwhile, the servants see a lot of Lord Hepworth talking to Ms. Shore, which causes plenty of suspicion - even though Ms. Shore insists that Lord Hepworth is simply trying to get her to put in a good word for him with Rosamund.
Leading up to the trial, Thomas wonders whether he will finally earn a promotion; Mrs. O'Brien suggests that to abandon the stigma of his earlier thieveries, he ought to "lose" something of Lord Grantham's and then miraculously find it. Thomas quickly picks out Lord Grantham's dog, Isis, and hides her in a shed off in the woods. On his return, Matthew goes shooting with the men and Mary accompanies them. A quarrel ensues between her and Sir Richard when he sees Mary laughing at something Matthew said. During a moment alone, Mary confesses to Matthew that she has grown tired of Sir Richard. Later, an awkward moment between Richard and Mary forces Matthew to say that she does not have to marry him; Mary admits that indeed she does, but confesses that she can't tell Matthew why or he will despise her.
At the trial, the testimonies - truthful and horribly difficult - of Mrs. Hughes, Mrs. O'Brien, and Lord Grantham all sway the verdict toward Guilty. Bates is sentenced to death, to the complete heartbreak of Anna. Though Matthew assures the maid that they can get the sentence down to Life Imprisonment, and then challenge the verdict, Anna is not hopeful. Bates tries to insist that she cheer up.
The planchette game gains a lot of popularity upstairs with the servants. Even after she tells William's father the truth about her affections for William, Mrs. Patmore makes Daisy believe that visiting her father-in-law is a good idea. The planchette convinces Daisy to take the trip.
Upon the encounter between Mary and Richard, Lord Grantham wonders aloud to Cora why Mary believes she must marry the edgy suitor. Cora decides the moment is right to tell Lord Grantham of Mr. Pamuk, and in whose bed he was really found deceased. Luckily for Mary, Lord Grantham is not fazed by the news; he tells Mary that she has his blessing not to marry Richard. In lieu of Bates's guilty verdict, Downton Abbey will be prey to all sorts of scandal anyway.
Matthew returns from London with news that he will scatter Lavinia's father's ashes in Lavinia's grave. Mary decides to be there with him. During a walk, Mary then confesses the truth about the Turkish diplomat to Matthew, who is little comforted when Mary tells him that it was not love, but lust that put Mr. Pamuk in her bed.
Problems arise too for Rosamund when Violet learns that Lord Hepworth is after her to solve his financial problems. Violet insists that Hepworth tell Rosamund the truth before they have her blessing to be wed. Meanwhile, Thomas tries to rescue Isis, but the following morning, she has escaped from the shed.
Mary joins Matthew and his mother at the ash-scattering, after which Isobel insists to her son that Mary is still in love with him. Thomas tries his best to find Isis, only to discover that she has already been found.
Sir Richard is dismissed by Lady Mary, but he does not leave without a fight - with Matthew. Upon accusations about his relationship with Lavinia, Matthew strikes Sir Richard and the two brawl for a moment before Richard leaves. Mary manages to say a few kind words before he departs, though he seems determined to sell her story and the story of Bates to the paper, no matter the terms on which they leave.
Bates's sentence is changed to Life Imprisonment - news that makes Anna decide to stay at Downton Abbey after debating whether she should go.
Daisy visits William's father at the farm, who assures her that William probably married her so that he would not be alone. He asks Daisy if she will be his daughter, and she accepts. Her return to Downton Abbey brings a new sense of spirit to her work, so she asks Mrs. Patmore for a promotion; Mrs. Patmore argues her way to accepting Daisy's offer.
After revealing the truth about Lord Hepworth to Rosamund, Mary adjourns into the snow. She is followed by Matthew, who tells her that he does not need to forgive her for Mr. Pamuk - that they've lived their lives separately, and now must live them together. Matthew proposes marriage to Mary, and she accepts him happily.