[2] Most of his children's books were set in the Sítio do Picapau Amarelo ("Yellow Woodpecker Farm" or "Yellow Woodpecker Ranch"), a small farm in the countryside, and featured the elderly ranch owner Dona Benta ("Mrs. Benta"), her two grandchildren – a girl, Lúcia ("Lucia") who is always referred to only by her nickname, Narizinho ("Little Nose", because she had a turned-up nose) and a boy, Pedrinho ("Little Pete") — and a black servant and cook, Tia Nastácia ("Aunt Anastacia").

These real characters were complemented by entities created or animated by the children's imagination: the irreverent rag doll Emília ("Emilia") and the aristocratic and learned puppet made of corncob Visconde de Sabugosa (roughly "Viscount Corncob"), the cow Mocha, the donkey Conselheiro ("Counsellor"), the pig Rabicó ("Short-Tail") and the rhinoceros Quindim (Quindim is a Brazilian dessert), Saci Pererê (a black, pipe-smoking, one-legged character of Brazilian folklore) and Cuca (an evil monster invoked by Brazilian mothers at night to convince their kids to go to bed).

[citation needed] Many of these books are educational, teaching things through the mouth of Mrs. Benta and by smart questions and remarks, by her young and attentive audience.

In other books, the author, who was a skeptic, a rationalist, an internationalist and had anti-war positions (but at the same time being strongly patriotic and conservative), passes his views on the world, humanity and politics to his young readers.

This movement, called O Petróleo é Nosso (Oil Belongs to Us) was highly successful, and the same Getúlio Vargas, after being democratically elected president, created Petrobras in 1952.

"[5][6][7] An academic analysis made by the Instituto de Pesquisas e Estudos Sociais at the Rio de Janeiro State University characterizes Monteiro Lobato as a "dangerously influential racist working on the scholastic area", citing a letter Lobato sent to Toledo Neiva, in which he complains about "a country [Brazil] where men don't have strength enough to organize a Ku Klux Klan", and comparing it to the United States by mentioning André Siegfried, "glad that they're not a second Brazil.