The local woodlanders are carrying on with their everyday life as normal until one morning when two men Harry and Joe start clearing the entire forest with their tractor.

Blinky was a very mischievous sort causing trouble and receiving a scolding from Mayor Pelican, his teacher Miss Magpie and his mother for his many antics.

Blinky approaches the mayor who is less than pleased, and orders Nurse Angelina to take the children to the leaking North Cave.

Ignoring the fact there is danger there, Blinky goes to find his mother at the mill, and Nutsy follows him as they make their way through a rampaging river and the woods.

The next morning Blinky and Nutsy witness the woodcutters reducing the animals' former homes into sawdust, narrowly escaping the circular buzz-saw.

Blinky manages to slip out of the place, but Nutsy is trapped and makes a run for it, climbing into the bedroom of the family's daughter Claire.

Blinky locates his mother, and they all leave the place in the woodcutters' truck, while Claire waves tearfully goodbye to her new-found koala friends.

Guy Gross composed and produced music and songs, while all lyrics of the latter are written by John Palmer except "You and Me" and "Nutsy's Ballad", where instead are by Mattie Porges.

The film was followed by television series, The Adventures of Blinky Bill that aired on Australian Broadcasting Corporation, Seven Network, and ABC For Kids for three seasons.