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.