Katie Morag tries to help her busy parents by delivering the mail to everyone on the island. In a moment's distraction, her plans go awry and in trying to make things better, she actually makes things worse! With the help of her beloved Grannie Island, she eventually sorts everything out, and learns something too.

Katie Morag has two grannies - Grannie Island and Granma Mainland. The two grannies are as different as different can be. It's the day of the Isle of Struay Show with its main attraction, the Grand Struay Sheep Contest, and Grannie Island is trying to win the prize with her beloved sheep Alecina for the eighth year in a row. Neilly Beag, however, has high hopes that his own lovely ewe will take the cup.

Struay Primary School is so small that it only has one teacher in one big mixed-aged classroom. Katie Morag's teacher announces her retirement and her plans to leave the island.

Grannie Island tells Katie the story of the Big Smelly Goat, a tale of a woman who has a lot of children and a very messy house. With the help of a wise old woman she sorts out the chaos in rather an unusual way.

The new teacher arrives at Struay Primary School, bringing with him his son John, who Katie Morag rather takes against to begin with, although she is secretly impressed by his many stories of the marvellous place he used to live in.

It is Halloween and Katie Morag has dressed up as a pirate to go around the neighbours' houses to do a wee turn and collect a few treats. But it's a stormy night and she becomes unwell, seeking refuge at Grannie Island's house.