A trip to Mankato for some Christmas shopping flares into a nightmare when Laura and Almanzo's 2-year-old daughter Rose is kidnapped by Elsa Norris, an emotionally unstable young woman who is grieving the loss of her baby. Elsa brings the little girl home to her husband, and they care for her as their own. Laura, Almanzo, and Mr. Edwards search frantically for Rose and, along the way, are joined by young Samuel, an orphaned runaway who is searching for a family to call his own. Back in Walnut Grove, with his wife away for the time being, Nels jumps at the opportunity to teach his greedy daughter Nancy some important lessons about the true meaning of the season. Jason Carter will stop at nothing to afford a Christmas present for his mother, and John and Sarah do their best to make the holiday special for their boys, who may not have much to open on Christmas morning this year. Lastly, Mr. Montague--who is initially disgusted by the commercialism of Christmas--comes through for his friends when they need it most.

When Charles receives a 4-week paid vacation from his employer, he and Caroline decide to leave the younger children with an aunt and travel back to their beloved Walnut Grove for a visit. They are both delighted to reunite with Laura, her family and their friends, and they even get an opportunity to stay in their old house while John and Sarah Carter are out of town. Unfortunately, what begins as a joyously nostalgic trip down memory lane becomes an unimaginable battle when the Walnut Grove community learns that another man has legal ownership of the land. The coldhearted Mr. Lassiter is willing to let the current residents keep their homes and jobs, but only if they agree to work under his control--a compromise that nobody is about to accept. Armed with rifles, anger, and unprecedented determination, the townspeople take the fight as far as they can, but when Mr. Lassiter uses his upper hand in the matter to force them all out, they reach a unanimous, yet devastating solution to even the score.

Charles is making a business trip from his hometown of Burr Oak, Iowa to Minnesota, and since he will be passing through Walnut Grove, he invites Albert to join him. Father and son pay a visit to college-bound Albert's ideal school for becoming a doctor, and although the tuition is high, it appears that Albert has a chance at a full scholarship. Later, while revisiting the hometown in which he grew up, Albert--who loves being back in his beloved childhood town--takes an interest in a beautiful girl named Michelle. Little Jason Carter longs to lock lips with classmate Amy Bryant, and the town faces crop-related financial issues, prompting Charles to offer his help. Through all the good and the bad, it all gets thrown into perspective when Albert, who has been fatigued and having frequent nosebleeds, visits a specialist and receives some absolutely devastating news that can either make or break the Walnut Grove community as it is known.

Mr. Montague stays at the Wilder boarding house while he is at Walnut Grove researching for a book that he is writing. Matthew Roger has a hard decision to make when his biological father shows up. Matthew decides to leave Mr. Edwards and go with his father. Mr. Edwards moves into the boarding house so he wouldn't be lonely anymore.

Willie Oleson is about to graduate from the Walnut Grove School and Harriett is intent on him getting a college education. However, Willie has a plan of his own: marry his school sweetheart Rachel Brown and then run his family's restaurant together. Furious over the fact that Willie wants to go against her wishes, Harriet almost gets them to call off the wedding by spreading needless gossip.

Mr. Edwards and the residents of Walnut Grove make friends with an orangutan. But the friendship and the fun-loving primate's life may be short-lived when Nancy and Mrs. Olesen cause trouble.

Jason Carter starts working for an old lady. Jason becomes great friends of the lady. However, Jason's mom believes the lady is being too nice. Jason is forbidden to work for the old lady until Sarah finds out that the lady will soon die.

Laura gives birth to a baby boy. The baby is fine and healthy for a while. Then for no apparent reason the baby dies. To ease her mind of the death, she blames Doc Baker for what happened to her baby. Doc's reputation declines so much that he must leave town to find work. Just before Doc Baker leaves, Rose comes down with small pox. Doc must stay quarantined with the Wilders for two weeks. Watching the Doc save Rose's life causes Laura to rethink her attitude about Doc Baker. Laura and the rest of the town convince him to stay on.

When Albert continually breaks the law, Charles takes him out of the big city and back to Walnut Grove. Albert doesn't change in Walnut Grove because he is addicted to morphine. Charles finally forces Albert to stop using morphine. He stays with Albert while he goes through withdrawal. Thanks to Charles, Albert is no longer addicted to morphine. We find out at the end of the show that Albert will become Dr. Albert Ingalls.

Laura writes a book for a book writing contest. Her book is chosen. She travels to Minneapolis to work out a deal with the publisher. However, when the publisher wants her to change some parts in her book, she withdraws from the contest and goes back home.

The Older Brothers is a gang that used to have a notorious reputation. First they hold up Mr. Edwards but end up losing the money. Then they try to get ransom money for Mr. Edwards but that doesn't go very well.

When Mrs. Carter's mother dies, Sarah Carter's father comes to town. He tries to get the Carters to come with home back to New York. He wants the Carters to have a better life. The Carters tell him that home sweet home is in Walnut Grove. After a while, Sarah's father begins to understand while the Carters feel this way.

Jenny looses a necklace in a pond and almost drowns trying to get it. After the incident, she has partial brain damage and has to retrain herself to talk and walk. Jenny's friend, a retired doctor, helps Jenny to force herself to get better. Thanks to him, Jenny makes a complete recovery.

With Almanzo and John out of town for the National Grange convention in San Francisco, Mr. Edwards takes it upon himself to keep an eye out for Laura and Sarah. When an attractive minister with the diocese arrives in town on official business pertaining to Reverend Alden, Mr. Edwards jumps to the wrong conclusion when he notices both married women spending a lot of time together with the man.

Laura's childhood friend, Jane Canfield, comes back to Walnut Grove. Although she is blind, she falls in love with Mr. Edwards, a person who was old enough to be her father. Jane then undergoes an operation which allows her to see again. After a lot of soul searching, Mr. Edwards tells Jane that she should go out and find herself a better life. At the end of the show, we see Mr. Edwards in the distance watching Jane leave on the stagecoach.

The people of Walnut Grove are at first excited when the railroad wants to build through the town. This excitement doesn't last long. The railroad tells several people that they must leave their houses. The people make a stand at the Carter's place. This delay in building convinces the railroad to find a different route.

Nellie returns to Walnut Grove and discovers that Nancy is a lot worse than she ever was. When Nancy isn't the center of attention, she runs away. Nels and Nellie search until they find her. Just when they think Nancy has learned a valuable lesson, she proves that she really hasn't.

Mr. Edwards keeps Matthew at his place, but Nancy Oleson tells on him. A judge comes and rules that Matthew be placed in an institution. Then Mr. Edwards makes a statement that everyone is crazy sometime. He convinces the judge to allow the boy to stay with Mr. Edwards.

A traveling side-show comes to Walnut Grove. The main attraction is a wild boy. The wild boy escapes and becomes friends with the Wilders. The boy turns out to be Matthew Roger and the reason he acts wild is become he is given morphine.

A tiny circus performer, Lou, decides to look for work in Walnut Grove after his wife dies while giving birth to his baby girl. A prejudice Mrs. Oleson uses her power to make sure that the dwarf doesn't find work. She even threatens Mr. Anderson that she would close her account at the bank if he hired Lou. To keep the infant alive, the dwarf must steal food. Mrs. Oleson decides to press charges when she finds out who stole the food. When Nancy falls in a well, Lou risks his life to save the girl. That's when Mrs. Oleson decides that being small has its advantages and decides to drop all charges.

Mr. Stark has gotten himself so far in debt that he has lost his mind. He goes home and shoots his wife and daughter. Then he goes off and ends up at Laura's house. He mistakes Laura and Jenny for his wife and daughter, but when he sees Rose, he thinks that his daughter has had a baby.

Looking to clean up Lars Hanson's old house in hopes to sell it for a nice profit, Mrs. Olsen stumbles across an old bearer bond. Instead of cashing it in and bankrupting Walnut Grove, she decides to use that bond to call in favors for her family – starting with changing the name of the town. However, when she coerces Nels into running for mayor, Laura and the others on the town council uses a bit of gossip to convince Almonzo run against him.

Following Royal's death, Laura and Almanzo attempt to make Jenny feel at home. Meanwhile, Jenny feels like Royal's death is her fault, and as a result, she takes drastic steps to see her father again, only to be saved by a friend. Jeb Carter learns how to swim after he breaks his arm.

Following a rough winter, Charles decides to sell his farm to the Carter's and move his family to a new town in Iowa. Before setting off, Laura, Almanzo, and some friends throw a small party to say goodbye to Charles. Almanzo gets a letter from his older brother Royal that he and his daughter Jenny are coming for a visit.