A circus comes to Walnut Grove. Everybody is helping set up, except Nels Oleson. His long, lost sister is in the circus. Only Mrs. Oleson believes her husband's story about his sister. Nels is nominated to be the announcer at the circus. When he announces his sister, he says, ""My sister, Annabelle."" These words lead to Nels and Annabella becoming very close siblings.

A tiny circus performer, Lou, decides to look for work in Walnut Grove after his wife dies while giving birth to his baby girl. A prejudice Mrs. Oleson uses her power to make sure that the dwarf doesn't find work. She even threatens Mr. Anderson that she would close her account at the bank if he hired Lou. To keep the infant alive, the dwarf must steal food. Mrs. Oleson decides to press charges when she finds out who stole the food. When Nancy falls in a well, Lou risks his life to save the girl. That's when Mrs. Oleson decides that being small has its advantages and decides to drop all charges.