Life on Shipwreck Island is a bore for twelve-year-old Easterly Wind and her friends, Brian (age nine) and Kristin (age ten), until something strange happens just before the island's annual Summer Celebration Dinner. A lobsterman goes missing while fishing off the island, and there are signs of foul play. Then, just a day later, a local sailor's boat is found adrift, minus the missing sailor. The three children become obsessed with the mystery, and begin an investigation that leads them down a path of adventure.

While none of the islanders know what happened to the missing fisherman, the reader does. He was snatched out of his boat by the claws of a giant seven-foot-long lobster.

Assisted by a biologist and a crusty old lobsterman, Easterly slowly unravels what happened, but is also thwarted at every turn by Mayor Ruth Snackle, who wants to keep a lid on the story so that it doesn't affect the all-important tourism business.

Meanwhile, Easterly is getting more than her fair share of criticism from folks all over the island for starting the hysteria about a "phony monster lobster." People think it's bad enough that two islanders are missing without a few kids interfering with both the tragedy and the investigation. This only makes Easterly, Kristin and Brian persevere and take more risks to prove their theory, and those risks eventually bring them face to face with Claws.