Frank and Joe Hardy live with their parents in Bayport, a town in New York State. While delivering some important documents for their father, a reckless driver almost runs them over. The boys notice that the man had red hair.
Later, they meet their friend, Chet, and find out that a man with red hair stole his car. The friends went to report the thief to the police, and find out that a similar red-haired man tried to rob a shop in the neighborhood.
The next day, the boys and their friends set up a search for Chet's car. They do not find the car in any of the places in which they looked, but at lunch, it was found in a clearing. When they paraded back into town, the detectives found out that a gigantic mansion (called the Tower Mansion, on account of the towers that rose above the roof of the building) had been robbed.
Frank and Joe get permission to go with their father to the Tower Mansion, and they find out that their friend's father (a caretaker at the mansion) had been suspected of committing the robbery.
The police put him in prison, but soon withdraw the charge, there being too little evidence against the caretaker. The owner of the jewels puts a reward for whoever finds his missing jewels.
The Hardy boys soon find many clues that point to the criminal as being from New York City, like his red wig and a coat and hat which belonged to the scumbag.
The discovery of a New York criminal who operated in the Bayport area soon made the boys' father go there, but the thief tried to run away, getting himself badly injured in the process.
The criminal's last words were that he hid the jewels taken from the mansion in "the old tower".
The Hardy boys search both of the towers at the mansion but find no jewels there. They soon found out that the thief worked at a railway company, and noticed two water towers near the station near the man's former home. One of the water towers was newer, but the older one was sagging and almost falling.
The boys find the jewels inside the old tower and claim the large reward.