Back in London, Henry and Mortimer call on the detectives to get the full rundown of the confusing case. Holmes explains that Stapleton was actually the son of Roger Baskerville, Charles' younger brother who moved to South America and was presumed dead. Stapleton, or Sir Roger Baskerville, Jr., lived in South America and married Beryl Garçia of Costa Rica, the dark and lisping beauty masquerading as his sister. Having embezzled public money, Roger fled to England, changed his name, and established a school up north. When the school folded, Roger had to take off again, this time heading to Devonshire where he had heard of his stake in a large inheritance. Having made friends with Sir Charles, Roger heard of the myth of the hound and of Charles' bad heart.
To get the superstitious Charles out alone on the moor, Stapleton tried to enlist his wife, but she refused. He happened, however, to meet Laura Lyons, and he told her he would marry her if she got a divorce. Convincing her to get the necessary money from Charles, he made her miss the late-night appointment and unleashed his hound. Though Laura suspected Stapleton, she protected him out of love.
Once Henry arrived on the scene, Stapleton took his untrustworthy wife with him to London, where he trailed the baronet and she tried to warn him. Stapleton also made a point of stealing one of Henry's shoes to give his hound the baronet's scent. But the first boot he stole was brand new, not yet worn by Sir Henry and unsuitable for its intended purpose.
Holmes mentions that Mrs. Stapleton's letter smelled of perfume, and that the suggestion of a gentlewoman made him think right from the start of the Stapletons. Going on to investigate and ultimately establish Stapleton as the enemy, Holmes nonetheless needed proof, so he used Henry as bait to catch Stapleton red-handed. Holmes apologizes for using the baronet, but insists that it was necessary.
Mrs. Stapleton, for her part, both loved and feared her husband, and she was willing to warn Henry but not to reveal her husband's involvement. Stapleton himself encouraged the romance but could not help a jealous outburst the day he saw the two talking intimately.
On the night Henry came to dinner, Mrs. Stapleton realized her husband had his hound in the outhouse, and she confronted him. He revealed his relationship with Laura, and, when she reacted, he tied her up and gagged her. The only other loose end, as Holmes sees it, is just how Stapleton intended to claim the fortune. Though Holmes speculates that perhaps he would claim it from South America, he admits that he cannot predict behavior in the future. Henry heads off for a vacation with Mortimer to calm his nerves.