After the mill closes, Charles is unable to pay off his debt at the mercantile. Mr. Hanson is forced to close the mill after one of his big customers declares bankruptcy. This was after Hanson had already shipped them a bunch of lumber. Charles had been expecting two months worth of wages before Hanson was forced to close down. Charles must taken on several jobs at the same time. Mary gets a job to help the family, while Laura does the chores at home. When the bill finally gets paid, Nels tells Charles that he thinks Charles is the richest man in Walnut Grove, since he has a very loving family.

Charles and Caroline sign Mary up for the blind school in Iowa. At first, Mary is very reluctant to learn anything at the school. However, after being with her teacher, Adam Kendall, for a while, she turns her outlook on life around. Mary is such a great student that Adam asks her to help her teach at a blind school with him.

Almanzo asks for Laura's hand in marriage. Mr. Ingalls tells Almanzo to wait until Laura was eighteen. Not wanting to wait, Almanzo forces Laura to choose him or respect her father. Laura respects her father's wishes. Almanzo leaves town and causes Laura a lot of heartache. Harriet hires Percival Dalton to help her in the restaurant. Nellie and Percival fall in love and eventually Percival asks Nellie to marry him. Adam's father dies, which means that a new blind school wouldn't be built in Walnut Grove.

The Ingalls settle on the banks of Plum Creek in Walnut Grove. To get the farm set up, Charles must take on several jobs at once. He promises one person that if he didn't get the job done in the specified time, the person could have his oxen.

Laura and Mary start school for the first time. That is where they meet Nellie Oleson. Since Laura hasn't been to school before, she tries especially hard with her schoolwork. The students have to write an essay to present in front of the class. Laura recites what she would have written on the paper if she could have, instead of what was actually written on it.

After Julia Sanderson's death, her three children stay with Grace, with help from Mr. Edwards. When Charles is unable to find someone to adopt all three children, he has to make the difficult decision to place them in separate homes. At the very last minute, Mr. Edwards makes a monumental decision: he marries Grace - and they take on all three children.

The day before Christmas vacation started, Miss Beadle lets the children out early when she notices that a snowstorm is beginning. The children aren't able to make it home before the storm starts. The men of Walnut Grove search for the children while Doc Baker takes care of the frostbitten children that show up at the school.

Mary falls in love with Seth. When Mary's eyesight starts to get worse, Charles takes her to a specialist. He is devastated when the specialist tells him that Mary will lose her sight. Charles is unable to tell Mary for a while that she is going blind. When Mary does go blind, the whole family suffers.

Laura helps Adam and Mary set up a new blind school in Sleepy Eye to try to get her mind off of Almanzo. Almanzo gets very sick.

Laura connects with a sweet, shy classmate named Olga Nordstrom, who happens to have been born with a short leg. Charles has an idea that can change Olga’s entire life, but the challenge will be convincing the child’s stubborn widowed father.

The Christmas holiday is approaching and the members of the Ingalls family go about their holiday shopping in secrecy. Laura is able to buy her mom a stove that she wanted after she sells her horse to Mr. Oleson.

After a major disagreement, Nels and Harriet go their separate ways. Many people in town try to get the two back together.

A traveling circusman, O'Hara, comes to Walnut Grove and tries to get everyone to believe he has magic healing powders. However, he is really found out when Mrs. Oleson almost loses her life when she tries his healing powders instead of having an operation.

A widowed mother named Julia Sanderson (Patricia Neal) learns she has a terminal illness and, with no close relatives to care for her three children, John Jr., Carl and Alicia, she gets Charles to promise to find the children a new home after she dies. Meanwhile, Laura and Mary rescue some abandoned puppies, and the relationship between Mr. Edwards and Grace Snider begins to blossom.

Reverend Alden gets sick while collecting donations. Caleb Hodgekiss, an ex-convict, helps the Reverend by giving him a place to stay and volunteering to get the donations from Walnut Grove. Caleb poses as a friend of the Reverend so that he might get donations which he initially planned to keep for himself.

After Ms. Beadle sprains her ankle, Caroline becomes the substitute teacher. Caroline takes a special interest in helping an older student, Abel, learn to read. One day Mrs. Oleson shows up and causes Abel to quit school. Because of this Caroline quits, but returns after she convinces Abel to give school another chance.

Caroline becomes pregnant. Shortly after the baby is born, he becomes ill. Believing that her jealousy was responsible for her infant brother's death and that her parents would rather have a son than a spare daughter, Laura climbs the highest hill she can find, hoping to get as close to God as possible to ask Him to take her instead and return the baby boy to the family. While Charles and Mr. Edwards desperately search for her, Laura meets Jonathan, a mystical mountain man who seems to have been sent purposely to guide her through this life-changing experience.

Charles and Hansen build a bank in Walnut Grove. The banker is Mr. Sprague, a cold and heartless man. Laura becomes friends with Mr. Sprague without knowing who he really was. Mr. Sprague believes that Charles sent Laura to him to try to persuade Mr. Sprague to give a loan to Mr. Ingalls.

Nellie falls off of Bunny and pretends to be paralyzed. Mrs. Oleson blames Laura for this and wants to destroy Bunny.

As the Ingalls, Garveys and Olesons return to Walnut Grove they discover a town that is badly in need of repair. With a lot of hard work, from everyone around them, they're able to get the town back to its old self, helping a number of people who feel they are living in a dead town, like Lars Hanson.

The school's new teacher is Ms. Wilder. Laura falls in love with Ms. Wilder's brother Almanzo. Laura is crushed when Nellie invites Almanzo over for dinner. Laura gets even with Nellie by volunteering to cook dinner for them. Laura adds some hot spices to the chicken and since Nellie had said that she had cooked the meal, Almanzo stays away from Nellie.

When Laura and Nellie get in a fight about the graduation test, Almanzo separates them and takes Laura home with him. When Charles finds out that Almanzo took Laura home with him, Charles goes to Almanzo's place and punches Almanzo because he fears his daughter was being taken advantage of. Laura yells at the fighting pair and tells them that she is no longer a child.

A schoolyard escapade involving Albert brands 15-year-old girl Sylvia a tease. The two fall in love, but Albert is unaware of a number of circumstances which have thrown Sylvia's life into a frightening tailspin - getting raped by an unknown assailant and the girl's domineering father.

In the beginning, things look very good for the Ingalls until a bad hailstorm ruins their crops. Charles and some other farmers must leave to look for work. They end up working in a quarry. While Charles is away, Caroline is able to get the women of Walnut Grove to join together to harvest the remaining crops.

While Charles is in Mankato, he runs into Mr. Edwards and invites him to come to Walnut Grove. Caroline tries to match Mr. Edwards up with Grace Snider, but instead she just ends up in the way since Mr. Edwards is able to charm Grace all by himself. Although there are a couple problems that must be overcome, things turn out for the best in the end.