The Ingalls family moves from Kansas to Minnesota and settle in a dugout "on the banks of Plum Creek" as in the book's title. Pa trades his horses Pet and Patty to the property owner for the land and crops, but later gets two new horses as Christmas presents for the family, which Laura and her sister Mary name "Sam" and "David". Pa soon builds a new above ground wooden house for the family. The house is near a town called Walnut Grove.
During this story, Laura and Mary go to school for the first time where they meet their teacher, Miss Eva Beadle. They also meet Nellie Oleson, who makes fun of Laura and Mary for being "country girls". Laura plays with her bulldog Jack when she is home, and she and Mary are invited to a party at the Oleson's home. Laura and Mary invite all the girls to a party at their house to reciprocate. The family soon goes through hard times when a plague of Rocky Mountain Locusts decimate their crops. The book ends with Laura's Pa returning safely to the house after being unaccounted for during a severe four day blizzard. Laura is portrayed in this book as being seven to nine years old.