Charles' father, Lansford Ingalls, doesn't want to live after his wife dies. Charles brings his father to Walnut Grove to help him out. When Laura's horse gets hurt, she blames her grandpa.

When Laura's dog, Jack, dies, her Pa gives her a new dog, Bandit, after the dog follows him home. Although the dog seems very friendly to Laura, Laura doesn't want it. When Laura later visits Aunt Kezia, a lonely women, she realizes that she really loves Bandit.

Charles and Caroline go away and leave Mary in charge. Laura and Andy find some baby wolves.

Things are being stolen in Walnut Grove. Laura and Andy try to figure out who's the crook. They end up getting a lot of people mad at them, including Mr. Ingalls, especially after his hair turns green.

Jesse and Frank James hide out in Walnut Grove. The people of Walnut Grove find out who they really are when bounty hunters come looking for them.

After Mr. Garvey's barn burns to the ground with the crops inside, his wife, Alice, takes a job at the post office. Mr. Garvey opposes this believing that a man should be able to support his family. He is ready to get a divorce until he realizes what his stubborn pride was doing to his family.

Mrs. Olesen may finally get to drive those ""homely"" Ingalls from Walnut Grove for good when the family gets an inheritance from a wealthy relative. Against their better judgement, Charles spends the money on farm equipment and other things before finding out he used worthless Confederate funds to make the purchases.

Charles and Caroline are going to have another baby. Caroline constantly refers to the baby as he. Caroline delivers the baby sooner than expected causing Charles to be the doctor. The baby ends up being a girl, Grace.

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.

Albert experiments with smoking in the basement of the School For the Blind and, when shooed out of the basement, hides the still-lit pipe in some cloths. It ignites and results in a late-night fire that kills Alice Garvey and Mary's baby son. As a result, several people struggle with the consequences: Albert becomes withdrawn when he learns his careless actions may have caused the fire, Mary in deep shock and Jonathan Garvey in an alcohol-induced state of denial. Albert, Mary and Jonathan - all deeply impacted by the fire at the school - continue to deal with their emotions. Charles helps Jonathan realize that his alcoholism has taken a toll on his son, Andy, while Mary snaps out of her shock when she hears the melody of the music box Albert had purchased for her as a gift. Albert panics when he finally understands his carelessness caused the fire that killed Mary's baby and best friend's mother. He runs away, leading Charles and a reformed Jonathan to frantically search for the lad.