Danni McGregor secretly enters the electrifying and dangerous Snowy River cross-country race — an annual race created in honour of her father's famous ride years before. Then, a mysterious American appears, determined not only to win the race at any cost, but also to challenge Matt McGregor himself in the original death-filled ride down the mountainside.

Matt suggests to Jack Kelly that he work for Kathleen in exchange for food and board. Reluctantly, he agrees to do so. Jack and Kathleen argue from the start, but obviously need one another. Oliver Blackwood continues his efforts in trying to undermine Kathleen's hold on her land. Rob and Luke court danger to win Victoria's affections, chasing down a wild stallion. Matt must intervene when Danni is severely punished by the new teacher.

Matt McGregor finds he has a competitor for Kathleen's affections when his mate, Steve Page, arrives at Paterson's Ridge and becomes smitten with the fiery Kathleen. Kathleen's new Braham breaks loose, and she gets caught in the middle of a sudden storm looking for it. When she hasn't arrived back by nightfall, Matt rides off in search of her. Meawnile, Luke starts prospecting for gold on his father's old claim.

Victoria Blackwood and her chaperone return from shopping in Melbourne, but their train journey ends when the tracks are washed away in heavy rain. Rob is sent to collect them and shares a passionate kiss with Victoria. Matt and Kathleen have a disagreement about Sean Carney's education and Emily donates a new organ to Colin's church.

Matt's old flame Anita Hargreaves returns to town after 25 years away just as her father suffers a heart attack. Matt is dumbfounded by her hospitality towards him — and Kathleen's coldness. A bitter Anita forcloses on Matt's loan, only to learn that she had not been jilted by Matt years ago, but tricked by her father. Luke strikes gold.

Danni McGregor and Michael ride into a herd of brumbies. In the confusion Danni is thrown and falls into a disused mine shaft. Michael goes for help, but becomes lost in dense scrub and falls unconcious from cold and shock. Anita sees Matt's obvious affection for Kathleen and realises trying to rekindle their lost love could be useless. News of Luke's gold strike spreads.

Lawlessness abounds as miners stream into Paterson's Ridge. Anita Hargreaves invites Luke to dinner. Colin McGregor proposes to his organist Emily Cornish. Rob and Luke, in defending Victoria Blackwood's honour, get into a punch up with some miners, and Matt finds the courage to ask Kathleen to go with him to the Mountain Ball. Meanwhile, Frank Blackwood plans to poison Kathleen's cattle to force her from her land.

Oliver Blackwood schemes to take over Matt's land. Frank Blackwood is jealous of his father's business dealings with Luke. Herbert arrives home with some local dignitaries to find Anita and Luke in a passionate embrace. The next day their liaison is all over town, and Anita arrives at the Mountain Ball on Luke's arm. Oliver Blackwood asks Anita to share his life at Balmoral, but before she can answer, a shot rings out and he falls to the floor.

Frank steals a substantial amount of gold from Luke, only to have it taken from him by gentleman bushranger Harry Roebuck. Meanwhile Luke, already mortgaged to the hilt, falls further into Blackwood's debt. Blackwood arrogantly makes Matt an offer for Langara, saying he has plans to marry Anita.

Luke is again pursuing a more than willing Victoria as she helps him search for a new house. Oliver Blackwood inadvertantly nominates a reluctant Matt to run for state parliament forcing him to get Luke to run against him. Danni experiences first love when she falls for an accused cattle rustler. Colin and Emily marry but Matt seems to have eyes only for Kathleen.

Oliver Blackwood becomes part owner of the bank and is delighted to learn that Langara's deeds are security against Matt's loan. Luke proposes to Victoria Blackwood to the dismay of her father who refuses to support the union. When Luke and Victoria persist, Oliver tells his daughter she will be completely disinherited if she marries a McGregor. Matt wins the election.

Everyone is excited that the railway is coming to Paterson's Ridge, except Kathleen, because it will run straight through the middle of her property. She decides to go to Melbourne to argue her case. Matt is also going to the city to be sworn in as a new Member of Parliament. They travel together and Matt takes Kathleen to the ceremony where she pleads her case to the governor and then to a ball. They dance together and, filled with emotion, he tells her he loves her. Meanwhile, Oliver hires a mining engineer to conduct an assay of Luke's mine and Vernoica is sent to England.

Oliver Blackwood learns Luke's mine is worthless and tricks Luke into buying him out. Luke discovers the truth but it is too late and he is forced to abandon the mine and lose his mansion. The bank threatens to foreclose on Matt forcing him to muster his cattle through Blackwood's property to get to the cattle sales, but Blackwood is determined to stop him. Luke is knocked unconscious after an explosion in his gold mine.

Colin speaks out against alcohol after a teenager is found drunk. The bootleggers in turn set light to the church. At the same time, Grady Hocking and his two sons, George and Greg, have come to town.

Matt and Oliver become lost in the desert while returning to Paterson's Ridge from buying stock. Matt accepts the help of an Aboriginal and his wife, but Oliver refuses.

Poor railroad workers live in deplorable conditions, and Kathleen sets out to help them and their families.

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The arrival of a travelling boxing troupe in Paterson's Ridge, led by "Dandy" Jim O'Rourke, has the community, including the McGregors, ready to try their hand. A visiting pianist is suspected of being a con man.

A drought causes a flood of hostility between the McGregors and the Blackwoods over a shared boundary creek when Frank changes the course of the stream.

Matt and Kathleen fight a land-grabbing politician's scheme to drive the farmers from the high-country after news breaks that their high-country grazing leases are about to expire.

A trapper wanders into town with news about Joanna's father.

Joanna Walker is determined to find her half-brother and Kathleen O'Neil agrees to accompany her in the search.

While going to fish one day, Colin and Rob discover the stagecoach, which tumbled down a cliff. The only survivors are a woman and a baby. The woman, Ruth Whitney, claims that the baby is not hers, but nobody in Paterson's Ridge believes her.

Edward Dengate is the new constable in Paterson's Ridge, which he hates because he would rather be a farmer. Matt convinces Edward's father that he cannot choose his son's life for him, and Edward leaves to fulfill his dream.

The British army comes to town and attempts to recruit the locals using some dubious methods. Much to Matt's dismay, Rob is tempted to enlist. However, Rob finds himself conflicted about leaving because of his growing feelings for Ruth.

The notorious Reilly gang turns up in Paterson's Ridge in an attempt to evade being captured by the state troopers. While Matt and Rob are away mustering, the Reillys arrive at Langara and take Colin, Emily and Danni captive.

Ruth is forced to make a difficult decision after she is offered a position with the Associated Press in America. Ruth's article on the founding father of Paterson's Ridge threatens to unearth a Blackwood family secret.

A young Aboriginal boy must choose between his heritage and an education when his father arrives in Paterson's Ridge.

The residents of Paterson's Ridge are given a look into the future when a hot-air balloon crashes. The pilot charms the townspeople - especially Michael, who is inspired to build a glider.

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Matt and Kathleen intervene and devise a plan to save the town's sawmill from bankruptcy.

The arrival of a family of Russian refugees in Paterson's Ridge creates friction with the locals, just as the completion of Colin's new church is uniting the community.

Matt is held responsible by an angry landowner when the government decides to take his land to dam the valley.

Kathleen has arranged to buy a new printing press from a wheeler-and-dealer in Blaine's Ravine, who tries to cheat her on the deal. Robbie and Michael outwit him. Montana Hale arrives in Patterson's Creek, complete with riding boots with spurs, American saddle, and Winchester rifle. Kathleen and Matt set a wedding date.

Matt and Kathleen's wedding day is marked, and could be marred, by a woman who appears at the church and wants to buy a horse from Matt. Matt finds a riderless horse and goes off to investigate, without telling anyone.

Montana's new horse is stolen by rustler Seb Holgate after she bests him in a shooting competition. Montana sets out after him and is joined by Kathleen.

McGregor takes a stand between an aboriginal man who is accused of the murder of a teenager, and the victim's father and two brothers who want revenge.

Danni and her father Matt argue after he tells her he wants her to go to a ladies finishing school. Objecting, Danni runs away to the cabin and spends the night, only telling Michael where she was going.

Kathleen's husband, who was thought to have perished eight years ago, returns to make amends with Kathleen and Michael for his deceit.

Emily is still ill from drinking water from the river and it turns out someone has built a dam. Matt makes the decision to get rid of the dam by using dynamite, but one person is killed in the explosion.

Josh is found in the woods but refuses to talk to anyone. Two graves are found, of his parents, so Emily and Colin take him in. But then people come to take Josh away - will he talk and tell the truth in time to stay?

Matt is blinded in a mining explosion and is aided by Kathleen and the family as he struggles to regain his sight. Meanwhile, Colin reveals a dark secret from his childhood.

Montana and Rob find an American surveyer who has been shot. They help him and he reveals he was shot by a man spying on Montana. When Montana claims that she has seen someone loitering by her property and her horses are poisoned, Rob is determined to protect the woman he has more than neighbourly feelings for.

Montana is charged with the murder of Sam Taylor's father and scheduled to be extradited to America. But Matt and Kathleen get her a hearing in Paterson's Ridge with Matt as her defender.

When Matt allows visiting soldiers to camp on his land, Michael and Josh get swept up in the romanticism of the military - and Josh sets his sights on carrying a gun.

Danni falls in love with a stranger who arrives in Paterson's Ridge. His presence seems to have an encouraging effect on all the romances in town but his gift to make others happy masks his own unhappiness.

When Matt and his family visit Melbourne, they become embroiled in a political plot between English and Russian royalty.

During Paterson Ridge's charity sale, a book belonging to Mr. Elliott is accidentally sold. Kathleen finds - and publishes - a love poem that falls from the book but who is the lady of Herbert's dreams?

A fair is held in aid of church funds and members of Patterson Ridge all make donations. When a hand-written love poem is found in a second hand book, gossip around town is rife as everyone tries to work out who wrote the poem.

Mr Gleeson and Kathleen travel to Mansfield to collect an old friend who has travelled from England to visit him. When their carriage skids down an embankment, they find themselves stranded and injured in the bush.

A friend of Emily's arrives in Paterson's Ridge with her newborn child in search of a fresh start but her abusive husband soon follows to take her with him.

Macalister tries to persuade his wife to return by destroying the economy of Paterson's Ridge, but Matt finds a weak spot in his plans.

Duncan Jones, an old friend of Rob's turns up while Rob is away. Danni is suspicious of him though as he seems nervous. The Race is being re-run and none of the McGregor's are going to be competing.

Miss Hannah Kirov opens a Russian tea room at the back of the general store to generate more income. The hotel owner though isn't happy with the business he is losing, so he cuts his prices in half.

Jessie McClusky turns up in Paterson's Ridge to run the Railway Hotel. While much of the town doesn't like Jessie, it is Emily's reaction which has Colin worried. It takes a real heart-to-heart for Emily to reveal her secret.

Spanish gypsies pass through Paterson's Ridge, and Danni falls in love with Carlos, while Hannah loves Carlos' older brother. Then the town turns against the gypsies after several robberies take place.

Nell Frampton sells Matt a bull called 'The Grand Duke', but soon after the bull vanishes and another bull turns up dead. Meanwhile, Emily and Colin move into their home.

Duncan leaves town just before Rob returns. In town, the stables are going up for auction and Rob wants to buy them, but can't afford it on his own. He must try and convince Colin that they are a good buy.

Foundation Day has arrived and with it brings Henry Wagner to town. Henry is in Patterson Ridge to catch a rabid dog. Danni agrees to meet up with him to help him hunt the dog.

Two teenagers go missing in the scrub so Matt and Colin set off to find them. In town, a man has arrived to see Jessie one last time before he dies.

Dave Turner arrives at Emily and Colin's to claim Josh and take him back to his family. Emily is upset and Josh believes that now Emily is pregnant, she and Colin won't want him around.

After a long absence, Victoria Blackwood returns to Patterson's Ridge, only to find that the land is gone and she has been left with nothing.

The stables are proving to be hard to financially manage as Rob and Colin get behind in the bank re-payments. Victoria turns down another proposal.

The Morrell clan turn up to settle an old score with Matt. As luck would have it Matt has left town leaving either Rob or Colin to fight in the duel - if they don't, the Morrell's will burn the town down.

Emily goes into labour while in the cabin shortly after Matt finds her with Nancy. Colin gets ready to fight in the duel, writing a farewell letter to Emily.