Pippi Longstocking arrives in a small Swedish town to take up residence in her Villa. The young girl lives with her companions, Horse and Mr. Nilsson (a monkey). All the townsfolk agree that the village will never quite be the same again. Annika and Tommy, Pippi's new neighbors, are excited about the adventures they are sure to share with their new friend; and the adults are certain that this eccentric little girl with her wild imagination, incredible strength and lack of parental supervision will cause no end of trouble.

Local crooks Thunder Karlson and Bloom are always looking for an easy and fast fortune. When they catch sight of Pippi's chest of gold, they are determined to get a share for themselves. Pippi proves to be more of an obstacle than they had bargained for.

Two city slickers decide they want to buy Villa Villekulla. Thunder Karlson and Bloom set themselves up as real estate agents and try to sell Pippi's house, without her knowledge or consent. Pippi appears to be playing along, but all the while she is on top of the game and gets everyone so confused that the city folk vow never to step foot in a small town again. Thunder Karlson and Bloom are escorted to jail.

Pippi finds a hot air balloon in the attic and decides to try it out with Annika and Tommy. They fly to the next town and inadvertently manage to assist in the capture of two crooks.

Captain Longstocking docks in the village to pick up Pippi and take her with him to the South Seas. Annika and Tommy are given permission to go along and they all set sail for adventure on the high seas. Pippi teaches the Settergren's about life on board, teaching them to be look-outs and how to manage a pirate attack. Unbeknownst to the Captain and crew, Thunder Karlson and Bloom are castaways yet again in search of their fortunes. Unfortunately, they get very sea sick and the fortune is not as easy to access as they had hoped.