Four orphaned children—thirteen-year-old Henry, twelve-year-old Jess, ten-year-old Violet, and five-year-old Benny—flee their cruel grandfather and an alcoholic father after their mother's death. Armed with only a few dollars and two loaves of bread, they walk through the night to escape the town of Middlesex and hide in a haystack before discovering an abandoned wooden freight car in the deep woods.
They quickly transform the rusty car into a comfortable home. Henry earns money by mowing lawns for a young doctor, while the girls gather wild blueberries, find discarded dishes in a dump, and build a natural swimming pool in a nearby brook. Along the way, they rescue an injured Airedale dog named Watch, who becomes their loyal protector and companion. The children learn to work together, cook over an open stone fireplace, and even teach little Benny how to read using homemade blackberry-juice ink.
When Violet falls seriously ill with pneumonia, Henry brings her to the doctor, which inadvertently leads to their grandfather discovering their whereabouts. James Henry Cordyce, a wealthy and kind-hearted industrialist, finds his grandchildren but decides to stay incognito at first, winning their affection before revealing his identity. After a joyous reunion, the grandfather brings the children to his luxurious estate, ensuring they will never have to run away again.
To preserve their cherished memories, Mr. Cordyce has the old freight car secretly transported and placed in the Italian garden of his estate. The children are overjoyed to find their beloved rustic home preserved among the flowers. The story closes years later with the children grown, though Watch still loves to rest on the old wooden floor of the freight car, content and safe.