Anna, Pam, and Lulu are planning a camping trip with their ponies. Anna is excited about the overnight trip and trail riding with her pony, Acorn. But the trip turns out to be a bigger adventures than the Pony Pals expected.
A little girl, Rosalie Lacey, is missing! Did she follow the Pony Pals into the woods? Can the Pony Pals rescue Rosalie?
To prepare for the annual summer firehouse fair in Wiggins, Anna braids the pony pal color, periwinkle blue, into her pony Acorn's mane. Anna's father is a volunteer fireman and is in charge of games and rides at the fair. He has asked Anna and the other pony pals if they will provide pony rides at the fair.
The day of the fair, the Pony Pals spot kids lined up in front of a sign that says "Pony Rides $1.00". They meet six-year-old Rosalie Lacey who wants to ride Acorn. Rosalie loves Acorn and ends up spending the $5.00 her parents gave her on five pony rides on Acorn. She chats to Anna, and discovers that they are neighbors - Rosalie lives on School Street, and Anna lives on Main Street. Rosalie asks if she can visit Acorn, and Anna says yes.
The next morning, as Anna and Lulu are about to saddle up for a day of riding, Rosalie runs up to Acorn and gives him a big hug, to Anna's surprise. Rosalie asks for another pony ride, but Anna turns her down saying that they only have three ponies for three riders, and two riders per pony is unsafe. Anna finally convinces Rosalie to leave by telling her that she can ride Acorn when the Pony Pals are back from their trail ride and Rosalie is done with day camp, at 4:00.
After their trail ride, Pam reminds them that the Pony Pals are having a picnic and barn sleepover at her house that night. Anna had forgotten, and knows Rosalie will be at her house waiting to ride Acorn. She rides back to her paddock and discovers that Rosalie has a 'surprise' for Acorn - three huge piles of hay each topped with a mound of oats and carrots. Anna scolds her that she can never give a horse that much food, because overeating can kill them. Anna is annoyed that she will now have to clean up the oats and hay before Acorn can get into them.
When Anna gets to the Crandals', the Pony Pals discuss what they still haven't done on their summer vacation. They decide to have a campout, with their ponies of course. They decide, with their parents' and Ms. Wiggins's permission, they will camp out at the Wiggins Estate. That way, their ponies will be rested and they can explore some farther trails. Lulu knows that her father Mr. Sanders and Ms. Wiggins will be having supper that night at the Off-Main Diner, so they decide to go there to ask permission for a campout. Ms. Wiggins says she knows a perfect campsite for them near her house, where there will be a small corral that will be perfect for their ponies. The girls start planning their trip, including all the food and clothes they will need to bring.
In the middle of their planning, Rosalie and her mom walk into the diner. Rosalie asks them where Acorn is, and why they are doing 'homework' on vacation. Anna tells her about the camping trip.
The next day, the Pony Pals head to the Green Market to buy groceries for their camping trip. They run into Rosalie's mother again. Mrs. Lacey is somewhat cold to Anna and tells her not to encourage Rosalie in her obsession with ponies, because there is no way she will have the money to buy Rosalie a pony. Back at Anna's paddock, they see Rosalie again, and ask her if her mother knows where she is. Rosalie says her mother doesn't, but her brother, Mike Lacey, who takes care of her after day camp, does. The Pony Pals know Mike and don't like him - he is friends with Tommy Rand, and both are the meanest and most annoying boys in the eighth grade.
The next morning the Pony Pals leave for their camping trip, and Rosalie is there to see them off. Lulu's father and grandmother give them some extra supplies for the trip- an emergency whistle and a first aid kit. The girls tell Rosalie to go to day camp.
The Pony Pals ride to the campsite on the Wiggins Estate, and see that Ms. Wiggins left them a tent, a red bucket, a gallon jug of water, and a note. The note says she will come by for dinner and make a campfire. The Pony Pals follow the map Ms. Wiggins gave them and ride the trails around the estate. After a while, they hear a noise - a short blast followed by a long blast followed by a short blast - the S.O.S. signal. A few minutes later, they run into Ms. Wiggins. She explains that there is an emergency - Rosalie is missing. Mike Lacey went to pick up his sister from day camp, but was told Rosalie hadn't been there all day. No one had seen Rosalie since 9:00 that morning.
The Pony Pals theorize that she had tried to follow them, so they decide to form their own search party. They plan to go back over the trails they took that morning. The Pony Pals are worried - the blue sky had turned gray with storm clouds, and the temperature had dropped.
Lulu knows a lot about tracking animals from her father, so she tells Pam and Anna to look for signs she's been on a trail or gone off it. They remember that she had on a yellow t-shirt and a periwinkle blue ribbon in her hair.
When the Pony Pals come across the wide section of Badd Brook they'd crossed that morning, they notice a blue hair ribbon on the edge of a rock. They walk toward a waterfall, but Acorn doesn't want to go that way. Anna looks down on the ground and sees the imprint of a small sneaker, and a lot of deer hoofprints. Anna concludes that since Rosalie doesn't know the difference between a pony hoofprint and a deer hoofprint, she may have followed the deer hoofprints. When they come to a fork in the road, they follow Acorn's lead to decide where to go next. After a while, they find Rosalie. Rosalie hugs Acorn, and Anna gives Rosalie her sweater so she won't get cold.
Anna helps Rosalie mount Acorn, and leads her pony back to where Pam is waiting for them at Badd Brook, now joined by Ms. Wiggins and her horse, Picasso. They lead Rosalie back to her parents and brother. Mrs. Lacey is crying and angrily says "Get my child off that animal" to Anna about Acorn. Mike Lacey says "You lost my sister. You could have killed her." Ms. Wiggins tries to explain, but just then an ambulance comes up to check on Rosalie. Once she's found to be okay, Mrs. Lacey tells Mike he needs to look after her the next day, and tells Rosalie "No pony rides" and that she is not to go near the Pony Pals.
The Pony Pals head back to their camp site and have supper around a campfire. They sleep in their tent, and the next morning they follow more trail rides before heading home. Before separating, they agree they need a plan to help Rosalie, or she may never ride a pony again.
The next morning the Pony Pals discuss what to do. They decide that Rosalie should play with Pam's younger siblings, Jack and Jill Crandal, instead of the Pony Pals, because she is closer in age to the twins. Pam plans to tell her mother to talk to Rosalie's mother and to invite Rosalie to their house when they shop at the Green Market. The Pony Pals see Mrs. Lacey the next day at the market. She apologizes for blaming them for Rosalie getting lost. It was Mike's fault not theirs - he had been letting Rosalie go to day camp on her own, rather than bringing her there. Mrs. Lacey seems more amenable to Rosalie liking horses after talking to the Pony Pals again. The Pony Pals invite Rosalie to ride Acorn the next day, and luckily, Mrs. Lacey says she can.