Episode 1 of "Young Sherlock" commences with Mycroft Holmes bailing his younger brother, Sherlock, out of prison after he is sentenced for pickpocketing and an altercation with the judge. At their home, Mycroft reveals that he has facilitated Sherlock's admission to a college in Oxford, where he can keep a watchful eye on the boy. The two brothers visit their mother, where Sherlock informs her about his forthcoming Oxford education. Mycroft drops Sherlock at Magdalen College, where he is taken aback to learn that he will initially serve as a scout before being enrolled as a student.
Concurrently, Chinese nobles, Mr. Chen and Princess Shou’an Chen, are being escorted from London to Oxford when they are ambushed by gunmen. They steal the scrolls from Shou’an, take her into captivity, and murder Mr. Chen before making their escape.
Shou’an uses the gunman’s weapon to fend off his accomplices, who are pursuing them on horseback. She employs her combat skills to defeat the gunman and knock him unconscious before escaping with the scroll.
When we next encounter Sherlock, he is working as a servant for Professor Charles Thompson. He spends his free time immersed in books, and Thompson is taken aback by Sherlock’s profound interest in mathematics. Sherlock borrows a novel on Arithmetic and returns to his duties.
While delivering a package to Shou’an, Sherlock notices a woman sitting alone. He drops a box at Shou’an’s chamber and strikes up a conversation with her in his halting Chinese, which he had learned while working with a shoemaker.
Meanwhile, Mycroft attends a lunch hosted by Sir Bucephalus Hodge, where he announces the opening of his new science facility. Various scholars, including Shou’an, will be studying there. Sherlock, who is serving as steward, teases Mycroft in front of Sir Hodge. Embarrassed by his brother’s antics, Mycroft apologizes to Sir Hodge.
One day, Sherlock encounters a scholar named James Moriarty in Thompson’s class. James takes note of Sherlock’s intellect and recalls seeing him steal something from Sir Hodge’s pocket at lunch. The two become acquainted as James takes Sherlock to a party.
They get into a heated argument with a scholar who mocks Sherlock for being a scout. As they leave the party, James grabs a bottle of alcohol. Using Sherlock's key, they sneak into a library where they discover Shou'an's 'Art of War' scroll, dating back to the 5th century BC. James suggests stealing it for a substantial sum, but Sherlock refuses and locks it back in its place.
The next morning, Smudger accuses Sherlock of stealing the scroll. He reveals that the cops are on his tail, prompting Sherlock to search for James. James tells Sherlock that Sir Hodge has revoked his scholarship and that he's about to be arrested.
The two men return to the library to investigate the robbery. The cops show up to arrest Sherlock, but Mycroft steps in and stops them. He helps Sherlock and James go back to the library to investigate further.
Sherlock notices a broken window and suspects a break-in. However, Sir Hodge shows up with Shou'an, accusing Sherlock of theft. Sherlock uses the broken window and clock as evidence of a break-in.
Shou'an argues that since the scrolls belong to her family, she should conduct the investigation. Sir Hodge reluctantly agrees but continues to investigate the theft.
Meanwhile, James and Sherlock grab a drink when they spot a suspicious-looking man. The man starts running, and Sherlock chases after him. The man attacks Sherlock, but James saves him. The two chase after the man, who is running with the scrolls. Sherlock realizes that the man was trying to create a distraction.
They follow him and learn that the scroll was empty. Sherlock concludes that the man wouldn't have been able to escape with the scroll through a window due to its size. He realizes that the scrolls are still in the library, and they go back to check.
They discover that the break-in was staged and find the scroll under one of the statues. Sherlock wonders if the thief wanted the library sealed off for their true mission and realizes that the cabinet the scroll was placed on is missing. They try to find a way the cabinet could have been taken out of the library and discover a hidden door.
The two follow the route and find a cabinet full of explosives right next to the room where Sir Hodge and his esteemed guests are seated. Sherlock and James break in and alert Sir Hodge and his guests about the bomb, saving their lives just in time. The act helps Sherlock and James redeem themselves.
The two celebrate in Sherlock's room when Shou'an arrives. She thanks them for saving her and asks for a drink. James excuses himself, leaving the two alone. Shou'an offers Sherlock a drink and helps clean the wound on his head. She flirts with him and pushes him onto the bed, where he passes out.
The next morning, Sherlock is arrested from his quarters for the murder of Professor Thompson, as the episode comes to an end.
