At Pony's Home, an old church and orphanage run by Miss Pony and Sister Mary, young Tom discovers that something is amiss outside. When Miss Pony and Sister Mary go outside to investigate, they find two abandoned babies, Annie and Candy White. Over the next decade, the girls become best friends who try to sabotage visits from possible future parents in order not to be adopted.

Annie thinks more and more about having parents. To console her, Candy takes her on a picnic without telling the Pony House where they are going. Candy just leaves a letter explaining that they will return before nightfall. During their journey, they are swept away by the current of a river but brought back safely to the Brighton house.

Candy departs for Lakeweood together with her raccoon Klint. She hitches a ride with Tom and his father Mr. Steave on their wagon. Mr. Steave expresses his doubts about the Leagans and advises Candy to be strong and never cry. From the very moment of her arrival, Candy is the victim of the nasty pranks by the Leagan children, Neil and Eliza.

The Brightons pretend to have a barbecue at the orphanage to ask to adopt Candy, but she wants to stay with Annie so she forces them to change their mind, which makes them fall back on Annie who agrees to be adopted.

Candy's life is punctuated by the passage of the letter carrier, Mr. Mathieu: she harasses him to get letters from Annie. But one day, Annie, under the pressure of her adoptive parents, writes her a farewell letter. In her sadness, she wanders to the hill where she meets a young man in a Scottish outfit who encourages her and whom she calls her "prince of the hill".

Candy wins the sympathy of the servants, but Daniel and Elisa continue to play nasty tricks on her. She hides Klint in the stable after trying to abandon him, but Daniel and Elisa take advantage of this to blackmail her. She runs away and meets a handsome boy at a flowery gate who reminds her of her prince from the hill, which encourages her to stay with the Legrands.

Candy attracts the wrath of the Legrands again and they punish her. So she decides to make an effort and become a real lady, but the Legrands want to make her a servant, so she runs away again and meets Archibald who is gallant.

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Elisa takes Candy to the city, but only to be a carrier. Elisa abandons her there, but Candy meets Alistair who helps her to come back home very quickly despite some adventures. Candy is invited to the party that welcomes Aunt Elroy who is going to live here (and at which she hopes to find her prince), but only because of her new friends.

At the party, Elisa makes fun of Candy's outfit, but her friends put on casual clothes to support her. During Aunt Elroy's speech, Archibald makes Candy laugh, which brings shame on her. Archibald and Alistair make her a dress, and she gets a dance with Anthony at Elisa's expense.

Unhappy with Candy's performance, the Legrands move her to the barn, but Sister Maria and John come to visit her, so she must keep up appearances, despite Elisa's protests. But the visitors discover the truth and Sister Maria gives her recommendations. Anthony, in compensation for Candy's difficult life, promises her a special rose for her birthday.

The Brightons visit the Legrands, but Annie must not show that she knows Candy. She is offered a horseback ride, but a trick by Daniel and Elisa wraps up the horse, and Candy must go to Annie's rescue, who shows her friendship by giving her a ribbon.

Candy discovers roses in the barn, but ends up understanding that it is Daniel who wanted to anger Anthony by making her look like a thief. She implicates him, but he says that the cat scratched her hands and accuses Candy of having stolen the ribbon, which discredits her. She flees to the river where she is saved by Albert, a vagrant, to be brought back by her three friends who have discovered the truth. Anthony gives her a new variety of rose, tender Candy.

Neil attempts to poison the horses, however, a shadow rushes into the barn and punches him, before running out again just as Candy arrives. Eliza blames Candy for Neil's black eye at the first opportunity, and torn between his pride, Eliza's wishes and his mother's insistence, Neil elects to blame Candy. Candy realizes it must have been Albert.

Mr. Leagan returns home from a long absence to find Candy downgraded to a servant, and decides Candy deserves a holiday at Pony's Home. Once there, Candy learns their neighbor, Mr. Cartwright, sold Father Tree to the eccentric Mr. Flannigan from Washington. He wants the tree all to himself, because he believes it would surrender the best business ideas. Candy leads the orphans and farm animals into an insurgency against the workers preparing the cutting and transportation of the tree.

At the Leagans, Candy learns that Dorothy will be sent off to Mexico as an extra hand for the Ardley property. Mr. Leagan is absent again and cannot intervene. Anthony helps Candy to retrieve the horses Eliza and Neil chased out of the barn and compliments her on her lasso throwing skills. The Leagan children chased off the horses as a distraction, so they can frame Candy for thievery. As a result, Mrs. Leagan decides Candy will be sent to Mexico in Dorothy's place.

The day before leaving for Mexico, Candy wishes to say farewell to Anthony, but instead witnesses how Anthony denounces his great-aunt when she orders her cousins never to play with the "thief" Candy. It does Candy's heart much good that all three believe in her, but she does not want Anthony to lose his family over her. She will go to Mexico and write him each day.

Candy discovers that Garcia, her pilot, has a bad temper. She discovers in the cart a poor family who is also leaving for Mexico. She leaves once to find milk for the baby, then she "borrows" the cart to have him treated in the nearest town. To pay the doctor, she has to sell her rosebush, then the family leaves.

Candy saves Garcia from a snake bite and gives him her medallion, but he delivers her to bandits to save himself. Remorseful, he frees her, but she is kidnapped by a motorist.

Candy thinks she will be sold in Europe, but she manages to escape while her friends search for her. She arrives at the Rose Gate to discover that it is George who has kidnapped her, as Great Uncle William has decided to adopt her; the Legrands and Aunt Elroy can do nothing about it, as Uncle William is the absolute master of the Ardley family.

Candy now lives at the Ardley estate, together with the Cornwell brothers and Anthony and a closet full of dresses given by great-aunt Elroy. Neil and Eliza still try to persist in their lies and accusations, embarrassing great-aunt and provoking Anthony and the Cornwell brothers to remind them that Candy is a member of the family. When they make Neil beg on his knees for forgiveness, Candy stops them: without their deception, she would not have been sent to Mexico and Grandfather William would not have adopted her to save her.

To get back at Candy, Elisa takes Anthony into the woods and causes an accident with Tom who is carrying milk. Anthony brings Elisa, injured, back home, then fights with Tom who called him a coward. For this, Anthony is punished and confined in a castle in the woods with a ban on contacting Candy, who would have a bad influence on him.

Despite the ban, Anthony and Candy correspond, first by carrier pigeon, then by a balloon designed by Alistair, which arrives at Elisa's house. Aunt Elroy discovers that Anthony wants to participate in a rodeo and tries to dissuade him, but a clever campaign convinces her to let him participate. And Anthony wins the rodeo.

An incident reveals that the prize of the rodeo was a calf. Unable to keep it, Anthony leaves with Candy to find a way to get rid of it before managing to sell it to Tom's father. So they decide to spend their money on small pleasures, and visit the fortune teller who seems to see a bad omen for Anthony.

The bad omens are piling up but do not dampen Anthony's good mood. A fox hunt is organized to officially welcome Candy to the Ardley family. Candy and Anthony isolate themselves from the group, and as Anthony prepares to reveal the identity of Candy's prince, his horse catches his leg in a trap and throws his rider off, breaking his neck.