Led by her Aunt Dete, Heidi arrives in the village of Dörfli to live with her grandfather, but the blacksmith’s wife warns Dete about her choice; no one should leave a child to this grumpy old bear! When they meet him he refuses to take care of Heidi and sends Dete away when she brings up dark memories of the past. Heidi sleeps in the barn with the goats, hoping her grandfather will be in a better mood after his night’s rest.

Uncle asks Peter the "Goat General" to take Heidi with him, but he isn't happy about taking care of the "town girl". They argue about how best to treat animals: Peter is quick to kick any goats that misbehave, whilst Heidi has a more gentle approach and she gets better results. Peter saves Heidi after she runs away, but one of his goats, Little Bear, gets hurt in the process. Heidi takes the blame which Peter is grateful for, but this infuriates Uncle who says Heidi isn't cut out for mountain life. Once again Heidi has to sleep in the barn.

Heidi and Peter get to know each other on a trip to the meadow, but Heidi gets captured by Karl and his gang. Peter challenges Karl to a race to climb Jackdaw's Cliff to save her, but when Karl gets stuck and is about to fall Heidi has to fetch Grandfather to save the day... much to his annoyance!

Heidi finds an injured goldfinch named Chippy and wants to save it. She goes to Peter for help but he is hiding in his secret treehouse. Peter's grandmother tells Heidi she needs Artemisia, a mountain herb, to save the goldfinch. She goes to find it but gets stuck in a shaft. Can Peter save her and the goldfinch?

Heidi and Grandfather visit the blacksmith, where she overhears that Karl is planning to attack Peter's treehouse. She alerts Peter and together they fool Karl into thinking that a cave in a meadow is his real hiding place. Peter invites Heidi in his treehouse and together they take the Treehouse Oath: never to betray each other and stay friends forever. But Karl realises he's been fooled and promises he will get revenge!

Peter tells Heidi that he hates school and she becomes scared that she will have to go. She has a nightmare about it and decides to run away to the cave to hide but finds herself in trouble. Grandfather wakes up to find Heidi missing - will he be able to save her before it is too late?