While wandering in the Limberlost forest with her bear Cubby, young, mischievous Laurie-Lou Duncan meets Freckles, an unemployed orphan who is on his way to the nearby Mr. McLean Lumber Company. Laurie-Lou introduces Freckles to Mary Arden, her pretty schoolteacher, who then introduces him to McLean. At Mary's urging, McLean employs Freckles to guard the vast Limberlost against timber thieves. With Laurie-Lou's help, Freckles learns about the forest and gradually becomes comfortable in his new surroundings. At the same time, Mary gives Freckles botany books to read and, attracted to him, encourages him to visit her at home. After McLean runs into Jack Carter, a convicted timber thief, at Laurie-Lou's mother's general store, he alerts Freckles and his other workers to keep a careful watch on the trees. Carter, who gives Laurie-Lou wooden soldiers that he has carved, is actually hiding out in the Limberlost with fellow bank robbers Al Waters, Butch and Lefty. While McLean and his lumberjacks are cutting down a tree that had been marked by would-be timber thieves, Laurie-Lou ties Cubby to a log to prevent him from eating her candy. When Laurie-Lou realizes that the tree is going to fall near Cubby, she rushes to untie him but is pulled away by Freckles just as the giant trunk is descending on her. Cubby survives his injuries, and a relieved Laurie-Lou is able to participate in Mary's school variety show. Later Laurie-Lou, desperate to have Carter carve her a captain for her wooden doll collection, hides in his car one afternoon and rides with him to his cabin. Carter, whose photograph has just appeared in the newspapers, keeps the innocent Laurie-Lou at the hideout, unsure of what to do with her. Eventually Freckles shows up and spots Laurie-Lou in the cabin. Carter and his men capture Freckles, but Freckles executes a surprise escape and, after being shot, locks himself with Laurie-Lou in a back room. When Laurie-Lou discovers Al's machine gun in the room, she shows Freckles how to load and shoot it. Although suffering, Freckles confronts Carter and his men, who have hacked their way into the room with axes, and holds them at gunpoint until Mary and an F.B.I. agent arrive on the scene. After Laurie-Lou congratulates Freckles for his bravery, Mary tells him that she loves him, and the young couple kiss.