In Episode 31, After Freddie's announcement of his marriage to Sally, the family warmly welcomes them. Several days later, Gabe and Louisa go out together to pay a visit to Olivia, who is confined to bed. Gabe lets Louisa help with the examination. The baby is found to be healthy, but Olivia is ordered to stay abed. They move on to the Elliot home where Lydia is examined. Gabe informs Christopher that his suspicions regarding the baby's sex are completely illogical. Lydia is given a cleaner bill of health and is not confined to bed. Gabe goes on to Tess and Nick's to see Georgie, but Louisa returns to Belleterre to work on the play. Stuart has a fainting spell and Gabe discovers her secret. After examining her, it is determined for certain that she is pregnant. Gabe offers Stuart the chance to go and stay with him and Georgie in San Francisco. That afternoon, the family gathers onto several sleighs and they all go out together to get Christmas trees, stopping last at Olivia's house to decorate hers. Later that evening, all the families partake separately in Christmas Eve celebrations. Connie receives the gift of a puppy from a "secret admirer."

In Episode 32, on New Year's Eve, the Marshall family production of Pride and Prejudice is performed to a rousing success. Will is surprised and angered when Marietta and Nick, "Jane Bennet" and "Mr. Bingley," share a passionate kiss. Later that evening, with everyone gathered together, Phil Elliot makes the speech he would have made prior to Lydia's marriage to Christopher, wishing her all happiness after their impending nuptial the next day. At midnight, people who are not married kiss each other, including Tess and a jealous Will. Nick, jealous in his own right, finds Louisa Hewitt the only young woman available to whom he is not related and makes a fool of himself kissing her. Steven stands up for his sister, and Nick tells him he has a choice between taking his revenge or kissing Grace. Steven chooses the latter. The next morning, Christopher visits Lydia before their second ceremony (they have slept apart). Her father visits, too, and Christopher hides in the closet. Later, the bride dresses at Libbie's house and the groom at Nick's. Olivia is given permission to attend the ceremony by Gabe as long as she stays off her feet and leaves immediately afterward.

In Episode 33, Lydia makes final preparations with Libbie and her mother. Eleanor tells interesting stories about Philip, John Henry, and Charles. At Belleterre, a nervous Christopher takes out his frustrations on the piano with Beethoven. Meanwhile, Georgie and Tess have a nice chat as they reminisce. After the wedding, Christopher and Lydia say goodbye as Olivia returns home. Grace opts to go with her to make sure she gets settled. After talking with Olivia for a while, she goes to Tess and Nick's house to see Stuart. Thinking it's Tess, Stuart bids Grace entrance to her bedroom. Grace observes Stuart holding up her shirt as she views herself in the mirror, looking very pregnant. Grace runs off and Stuart chases her, catching up with her on horseback and trying to explain. She begins having pains, though, and Grace has to go for Gabe.

In Episode 34, Grace returns to Belleterre and tells everyone that she came across Stuart, fallen from a horse with a broken leg. Grace returns with Gabe and Nick, with whom she is very angry. She accuses Nick of fathering the baby and tries to return to Belleterre when he won't give her any sort of explanation other than a denial. Stuart, meanwhile, recovers but is told to stay in bed for a while. It is settled that she will return to San Francisco in several weeks, when Georgie returns. Nick catches Grace before she can return home and tell everyone, managing to convince her to keep her mouth shut. Several days later, at church, John Henry tells Danielle Carrol that they have finally found a permanent teacher, a young man from Boston by the name of Madison Taylor. A short time later, they bid goodbye to Gabe and Steven, who are returning to San Francisco for work and school. Several hours later, the ladies gather to watch Georgie tell them about the new fashions she is planning for them. Belinda ends up saying some rude things, but Victoria has a few harsh words for her. A short time later, in John Henry's office, Richard announces to him, Charles, and Freddie that he is renouncing his right to the Stancliff dukedom because he has fallen in love with someone and is moving to Australia.

In Episode 35, Richard explains further that he has fallen in love with a patriotic Scot in John Henry's employ who refuses to be a duchess. He wants Freddie to take care of Belinda, Adam, and his finances in England. In town several days later, John Henry meets to new school teacher and is surprised to find that Madison Taylor is a woman. He tells her that a storm has damaged the old teacher's cabin and that she will be staying with Will and Marietta. They leave for a meeting of the school board at the Carrols' house. Some time later, Grace writes a poem in her room. She happens to see her father coming home and runs down to meet him. She asks if he will have a small cabin built for her by the hot springs so she may go there occasionally, and he reluctantly agrees. Later, Nick and Tess, Georgie and Louisa have dinner with Marietta and Will and meet Madison Taylor. Georgie and Tess tell Madison the story of Leroy, partially anyway, and insist that she cannot possibly live in the old cabin when it is repaired. The next day, Belinda has a confrontation with her future step-mother, Flora Campbell. Flora stands her ground and leaves Belinda's company, meeting Richard in the hall. They talk for a while before Richard goes in and tells an unreceptive Belinda about his engagement, and that fact that she will be returning to England without him.

In Episode 36, Richard and Flora, with Flora's son, Jamie, bid goodbye. Sally and Freddie go with them to Boise, and Richard has bought several of Nick's horses. Madison must discipline her class. After school lets out, she receives a telegram that disappoints her. The Elliot family gathers together and discusses Christopher and Lydia moving into their own house. Christopher says they must wait for the baby to arrive, and Libbie suggest to Phil that he buy them a house as John Henry did for her. In San Francisco, Gabe tells Stuart that he knows of a couple who have been trying to have a child for five years, but Stuart doesn't seem very receptive to the idea of giving her child up. She suggests that Nick and Tess adopt the baby, or maybe Georgie and Gabe. At Joe and Olivia's, Joe sits by himself in the kitchen imagining the time when his baby arrives, but it is Stuart in his imagination. Grace returns with Joey after taking him for a ride, but does not stay to visit. Joe takes his son up to see Olivia, and Olivia tells him that Louisa has told her the baby is doing better. That evening, the young married people of the Marshall family, and a few of the unmarried ones, have a jovial dinner together. Late that night, Grace sits awake in her room writing poetry, but spots someone taking on of their horses. She quickly chases after this person, but does not realize it is Madison Taylor.

In Episode 37, it's Valentine's Day. Past midnight, Grace catches up to the horse thief, but agrees to keep Madison's secret. Madison has injured her wrist. The family bids farewell to the England Marshalls, but Phil and Eleanor Elliot remain to await the birth of Lydia's baby. Charles, too, buys some of Nick's horses. Later, Grace, insisting on wearing skirts, rides to her new little cabin by the hot springs. She soaks for a while. Later, while drying her hair, she writes a poem. Tess appears just as Grace is leaving and unknowingly tells her that Joe is the one who got Stuart pregnant. Grace leaves immediately, and Tess is soon joined by Nick for a clandestine encounter. Meanwhile, at Joe and Olivia's, Maggie and Edward have come to stay with Olivia because Joe is leaving for a business trip in Oregon. Meanwhile, in town, Madison writes a curious telegram and sends one on her students to send it. Later, Grace debates telling Olivia about Joe and Stuart, but decides to do it. Olivia, to say the least, is crushed.

In Episode 38, Olivia leaves her house and goes to stay at Belleterre. She has a tender talk with her sympathetic father, ending it by telling him she's decided to go to England. Later that day, Madison writes a revealing diary entry. Benjamin and Victoria visit Olivia at Belleterre and Benjamin apologizes for his brother's actions. John Henry and Elizabeth have an argument regarding Olivia's justification in leaving Joe. It is discovered that Elizabeth has been silently forgiving John Henry's indiscretions since their marriage. John Henry becomes angry because he has never once stepped out on her, and she doesn't trust him. A short time later, Nick arrives to attempt to make peace. John Henry, fresh from his argument with Elizabeth, yells at him. Olivia jumps from bed upon seeing her brother and hits him. John Henry holds him firmly, forcing him to meet Olivia's wrath. Nick eventually gains Olivia's forgiveness. Several days later, Madison receives another disturbing telegram from her friend in the east. Jonathan has found her. Madison contemplates the situation with tarot cards. The next day, Olivia leaves Belleterre accompanied by Maggie, Edward, and Grace, who is taking her gun. Elizabeth makes a comment as the group drives away that further disappoints John Henry.

In Episode 39, John Henry and Lazarus discuss fidelity in John Henry's office. Lazarus suggests John Henry show Elizabeth what it would real feel like if she knew he had been unfaithful, without actually being unfaithful himself. It is also revealed that Lazarus' doctor grandson, "Jack" Jackson, is coming to town. Several hours later, Madison meets with John Henry at Belleterre to discuss the new home she was to have had built. John Henry agrees that it has been overdue and plans to talk with the rest of the board. In San Francisco, Georgie fits Stuart for a new dress. Stuart feels her baby kick. Gabe arrives with a telegram from Liberty Creek to tell Stuart that the secret is out. Late that afternoon, Madison and Sally have tea. Madison reveals some of her story, including knowing a man by the name of Robert Marshall in Boston. Sally keys into the name and wonders if it could not be the same Robert. She shows Madison the sketches Louisa has made of the entire family. Madison disguises her recognition of the sketch of Robert Marshall. Seeing the piano in the library brings back memories of Madison's childhood, when her mother fell ill.

In Episode 40, Sally doubts Madison's explanation of her surprise at seeing the sketch of Robert Marshall, but remembers a prior engagement she'd planned with Freddie. In San Fransisco, Joe, having completed his business in Oregon, pays Stuart a visit. She is completely unreceptive and angrily tells him to look after his own life, revealing only that something has happened at home and that he should go back and see. In Liberty Creek, Sally and Madison go riding to see how Madison's cabin is coming along. Sally reveals that Charles has managed to gain permission to give Freddie his spare viscountcy. In town, Lazarus and Danielle Carrol joyfully greet their grandson Jack. Danielle reveals that his Christian name is Angel, but Lazarus and Jack manage to keep her quiet about that. Some time later, Jack goes to visit his new clinic. The previous doctor's widow, Mrs. Pendergast, still lives upstairs. she is a strange woman. He later meets Madison and offers to escort her home, but she is not receptive to his advances. Jack is still left enamored. Across the Atlantic, Olivia and party have entered the English Channel. Olivia shows Joey England and France, then gets a tad emotional at the thought of returning to her old home.