In the farm lives an old widow, Dona Benta ("Mrs. Benta"), and her two grandchildren, a girl, Lúcia, referred to only by her nickname "Narizinho" (roughly "Little Nose", because of her turned-up nose), and her boy cousin, Pedrinho ("Pete"); the servant and cook, a black woman named Nastácia ("Anastacia"), and two talking puppets, the rag doll Emília (animated by some of Doctor Snail's "talking pills" she somehow "ingested") and an aristocratic and learned puppet made of corncob, the Viscount of Sabugosa ("sabugo" means corncob in Portuguese, "Sabugosa" is a parody of the real Count of Sabugosa).
The major features of the farm were established by the novel A Menina do Narizinho Arrebitado (The Girl With the Turned Up Nose), published in December 1920.
The stream later reveals itself to be a portal for a wondrous underwater world, the Reino das Águas Claras ("Clear Waters Kingdom"), where Lúcia creates a bond, particularly to its king, the fish Príncipe Escamado ("Scaly Prince").
At night, the Tucanos are a refuge for the Werewolf (or Lobishomen) and the Headless Mule, both originally ordinary people who suffered from an eternal and grisly curse.
In O Picapau Amarelo, the farm is visited by several fairy tale characters, including Cinderella, Snow White, Red Riding Hood, all of them led by Tom Thumb (a good friend of Emília's).