Catherine Cawood is a policewoman in the sarcastically nicknamed Happy Valley; the drug-affected Calder Valley in West Yorkshire, England. Her private life is complicated. She still sees and sleeps with her ex-husband, journalist Richard Cawood, even though he has a new woman in his life. She lives with her sister Clare, a recovering addict, and grandson, Ryan, whose mother, Catherine's daughter, Becky, killed herself after being raped. Now the man Catherine believes to be the rapist, Tommy Lee Royce, is out of jail and back in town. At the same time, Kevin Weatherill, disgruntled that his boss Nevison Gallagher will not give him a raise so he can enroll his daughter into a good school, conspires with caravan park owner Ashley Cowgill and his employees, Lewis and Royce, to kidnap Nevison's adult daughter, Ann, for a ransom. When Nevison has a change of heart and offers to pay for both his daughters' tuition, Kevin wants to abort the operation but the others go ahead with it. As the kidnapping unfolds, more people are drawn into the investigation and conspiracy, leading to tragic results.

Catherine and Ann manage to escape and are rescued by the police, but Kevin's questionable account of his involvement leads to his arrest and remand in custody and, via his phone calls, the arrest of Cowgill. Cowgill enters into a plea bargain for a reduced sentence by giving information about a vast drugs importation racket, and as a result he and his family will need witness protection. Catherine recovers in hospital and is visited by Ann, who asks her not to tell her mother about her rape by Royce. On discharge, Catherine is despondent since Royce is still at large.

Clare organizes a birthday party for Catherine with the family, colleagues and the Gallaghers but makes the mistake of telling Daniel that Catherine has been seeing Richard. At the party Daniel gets drunk and accuses his parents as well as harshly criticizing Becky, whom he claims was a spoilt bitch and Royce's willing partner, rather than the victim they have all beatified. Next day Lewis's corpse is discovered and Cowgill is murdered by the drugs gang. Royce hides out on a narrow boat and contacts Ryan, explaining that he is his father and encouraging him to visit on the boat. Catherine finds out and races to save her grandson, leading to a confrontation with Royce before the family is reconciled.