Katie and Brian Eames and their friend Reme spend their summer vacation exploring the fields and woods outside their little town, Misty Haven. Each day, they gather for ice-cold lemonade at the neighborhood pub and restaurant, The Dragon and The Rose, run by Mr. Amos Teagarden, who tells the children a legend from 10th-century Wales:
"There were two princes, stepbrothers named Vrolich and Rouge, who had become known as the Dragon and the Rose. The younger brother, the Rose, was an evil sorcerer who turned the Dragon's wife into a pillar of stone, and then transformed Vrolich into a real dragon. The Dragon departed Britain, flying westward over the sea, vanquished and heartbroken. "
In their adventurous explorations, and at nearly the cost of their lives, Katie, Brian, and Reme discover a secret cave and a sleeping dragon...the Dragon. Speaking in his ancient tongue, with Reme translating from Latin, the Dragon assures them of his royal lineage and good intentions. Together, the three children and the Dragon devise a plan to defeat the evil Rose.
The children, with their sometime captor Doris, and Mr. Teagarden fly on the back of the Dragon across the ocean to Wales, where they are met by Mr. Teagarden's relatives, who vow to help the young heroes. Far away from home, they are sure to encounter the forces of the Rose, severe danger, and a great battle as they struggle to set right an ancient wrong.