In the Ozark Mountains in Oklahoma, young Billy Coleman yearns for a coonhound, but his mother and father insist they cannot afford one. One day, at his Grandpa’s general store, Billy sees Mr. Pritchard, a local, pay thirty-five dollars for a coonhound puppy. Pritchard gives the dog to his two sons, Rubin and Rainie, who are ungrateful. As the Pritchards drive away, Billy tells his Grandpa that God might not want him to have a dog because he’s been asking for one but hasn’t received it. Grandpa suggests Billy might not be doing the necessary work to earn a dog and should “meet God halfway.” Realizing he needs to earn the money himself, Billy spends the next two years doing odd jobs and saving up fifty dollars. Once he’s earned the money, Billy brings it to his grandfather and asks him to order two coonhound puppies from a kennel in Kentucky. Soon after, Grandpa gives Billy a notice from the mail depot in nearby Tahlequah, Oklahoma, where the puppies have been delivered. Grandpa says Billy can get a ride there next week with a neighbor and gives him ten dollars in change, saying the hounds only cost forty dollars. At dinner that night, Billy’s sister Sarah presents a drawing of a red fern to their mother and recites the Indian legend about a young boy and girl who got lost in a blizzard and froze to death, explaining that when their bodies were found the next spring, a red fern was growing between them. At dawn, Billy sneaks away to Tahlequah on foot. Arriving there mid-day, he collects the hounds at the mail depot, and the station master provides him with a sack in which to carry them. Outside the depot, a gang of children stops Billy and bullies him, threatening to take his dogs. When the children start to brawl, the Sheriff arrives and breaks them up. Impressed that Billy paid for the puppies himself, the Sheriff helps Billy carry his load to a store in town where he spends his remaining ten dollars on gifts for his family. That night, Billy makes a camp in the woods, and after he falls asleep, the puppies wander away. Waking to find them gone, Billy quickly retrieves them, and is faced with a growling mountain lion. With the dogs in his arms, Billy hides behind the campfire until the cat goes away. The next day, Billy sees a carving in a tree that says “Dan + Ann” and decides to name his dogs Dan and Ann. Returning home, Billy is reprimanded by his mother for disappearing. Billy’s father happily coddles the dogs, and Billy gives his family the gifts he bought them – a pair of overalls for his father, fabric for his mother, and candy for his little sisters. Using a raccoon carcass on a stick, Billy trains the puppies to hunt, and, over time, they grow larger. As he leaves with the dogs on their first hunt, Billy’s mom provides him with food, reluctant to let him go alone at night. In the woods, the dogs chase a raccoon into a tree, and Billy tries to chop it down using a small hatchet. After he falls asleep there, Billy’s family finds him the next day. Billy insists he must stay and catch the raccoon because he promised his dogs he would get it. Billy’s father gives him a larger ax to chop down the tree, and hours later, Billy asks God to help him a little. At that, a gust of wind blows the tree down, enabling the dogs to catch the raccoon. Billy’s mother makes him a cap from the first coonskin, and Billy soon becomes the most accomplished coon hunter in the area. At Grandpa’s store, Rubin and Rainie Pritchard bet Billy two dollars that he can’t catch a wily racoon on their property nicknamed “Ghost Coon” and Grandpa encourages Billy to take the bet, providing him with two dollars. That evening, the Pritchard boys follow Billy and his dogs as they chase Ghost Coon. When the raccoon eludes the dogs, Billy pays the bet, but soon discovers Ghost Coon at the top of a nearby building. Billy refuses to kill the raccoon out of respect for its accomplishments, but demands his two dollars back since he found the animal. The Pritchards refuse him, and a fight breaks out as the Pritchards’ dog, Old Blue, appears, having broken off of his leash. As the boys fight, the dogs begin to fight in the river, and Rubin grabs Billy’s hatchet to stop them. However, Rubin trips as he walks away, falls on the hatchet, and dies. Leaving Rubin’s funeral, Billy tells his father that he tripped Rubin and feels responsible for his death, but his father tells Billy not to blame himself. Although he has renounced hunting, Grandpa gives Billy a notice about a coon hunting championship, and Billy agrees to participate so that Dan and Ann will have a chance to prove their skills. Arriving at the contest, Billy is assigned to hunt on the third night. After the first round of competition, he is named a finalist and sets out for one more night of hunting with his father and Grandpa. As a violent storm hits, Billy insists on following his dogs although his father and Grandpa advise him to stay out of the storm. Catching up to the dogs, Billy finds that they have chased three raccoons into a tree. Grandpa disappears, and Billy decides to abandon the raccoons. On Billy’s orders, Dan and Ann find Grandpa, who has fallen and hurt his leg. The next day, Sam Bellington is declared the winner of the contest, but he gives his gold trophy and cash winnings to Billy, claiming that he would have won the contest had his hounds caught the three raccoons. That night, Billy’s father tells his wife that they can move into town now, using Billy’s prize money. However, Billy’s mother does not want to move the dogs away from the farm, or split up the family by allowing Billy to stay in the country with Grandpa. One night while hunting, Billy and the dogs come across another mountain lion. The animals fight, and Billy enters the fray with his hatchet, hitting the cat and killing him. Dan is wounded badly, and although Billy’s parents tend to it, the dog dies. Without Dan, Ann becomes depressed and dies shortly after. Billy’s parents tell him their plan to move into town, suggesting that God took both of Billy’s dogs so that he could move with them. On their last day at the farm, Billy goes to the dogs’ gravesite and sees that a red fern has sprouted there. He calls his family over and they marvel at the plant.