After saving Ginny Weasley from the Chamber of Secrets, Harry Potter and Ginny are sentenced to life imprisonment in Azkaban for opening the Chamber of Secrets. While there, they encounter Rubeus Hagrid and Sirius Black. Sirius claims he is innocent of his crimes and explains the truth to Ginny, Harry, and Hagrid.
Having been given the Invisibility Cloak and his wand by his best friends Ron Weasley and Hermione Granger, Harry and Ginny escape their cell using magic and the Cloak and send the Dementors away by using the Patronus Charm, which he learned from Sirius. Sirius escapes his cell by transforming into his shaggy dog Animagus and Sirius turns Hagrid into a button. Needing to escape fast, Sirius transfigures Hagrid into a dragon, and they fly off him. Once on the shore, the four Disapparate. A manhunt is ordered.
Escaping to 12 Grimmauld Place, Harry finds out that after freeing Dobby, the house-elf is bound to his servitude. Harry tells Dobby to tell the Weasleys and Hermione that they have escaped. Sirius sends a letter to Remus Lupin, the new Defense Against the Dark Arts teacher, claiming innocence, and Harry sends a letter to Dumbledore and Minister of Magic Cornelius Fudge, but orders both to not arrest them on site. Lupin tackles Sirius but Sirius reveals Ron's pet rat, Scabbers, is Peter Pettigrew.
Pettigrew attempts to claim that Sirius joined Voldemort, but Fudge finds no Dark Mark tattoo on Sirius' arm, but one on Pettigrew's. Pettigrew is sentenced to Azkaban for his crimes. Fudge attempts to send Harry, Ginny, and Hagrid back to Azkaban, but Dumbledore uses the Diary of Tom Riddle as evidence that Ginny was possessed and that even though Harry speaks Parseltongue, he is innocent of all crimes. Hagrid is acquitted of all crimes after under the influence of Veritaserum, Ginny states that Tom Riddle possessed her and was the true heir of Slytherin.
Fudge orders the Dementors to call off the manhunt and sends Pettigrew to Azkaban. Sirius registers as an Animagus in the aftermath and gains custody of Harry. Lupin and Sirius apologize to each other for accusing the other of being the traitor. Harry resumes education at Hogwarts and after gaining consent from Ron, Fred, George, Percy, and Ron's parents, Molly and Arthur, starts a relationship with Ginny. Hagrid is allowed to get an education and is promoted to the position of Care of Magical Creatures. For his first lesson, he teaches the creature of hippogriff but Draco is given a detention when he attempts to prove the first hippogriff, Buckbeak. Harry helps the Gryffindor Quidditch team defeat Slytherin. Harry, Ginny, Ron, and Hermione go to Hogsmeade and while at Madam Puddifoot's, share their first kiss, much to Ron's dismay.
Harry finds out that Fred and George own the Marauder's Map. Harry gets a vision that Pettigrew has escaped from Azkaban and tells Sirius, Dumbledore, and Fudge. Fudge orders a manhunt after finding out that Pettigrew has indeed escaped. Gryffindor defeats Ravenclaw and Hufflepuff in the Quidditch final. Harry finds out from Sirius that Lupin is a werewolf, but is prevented from telling anyone due to prejudice against werewolves. Lupin resigns after his illness is exposed by Snape, who is bored. Dumbledore allows Lupin to choose his successor for the following year, and he chooses ex-Auror "Mad-Eye" Moody. Sirius sends Harry a Firebolt after Draco destroys Harry's Nimbus 2000 as revenge for Gryffindor defeating Slytherin in the first Quidditch match of the year.