An inquisitive cat named Puff wanders from home in rural Vermont and becomes lost in the Rainbow Forest. After running into a gallant deer named Jumper, Puff joins his proud companion in search of a secret cave hidden behind a towering waterfall to rest for the night.
During their journey, Jumper explains the rules of the forest as they encounter unusual friends along the way. The next day Puff and Jumper explore an enormous cavern at the far end of the cave where Puff has a near fatal accident. Then before emerging from behind the waterfall, a section of the rocky steps give way, as the unforgiving force of the falls pushes Jumper forever down.
Now alone, Puff continues through the forest where he stumbles upon a conniving fox named Felix. After a clever dialogue and narrow escape, Puff meets two brother otters who disguise Puff as they slip past the fox and a dangerous den of wolves.
Eventually Puff begins the long climb home. There he encounters a groundhog named Digger who proves helpful when Felix unexpectedly arrives and forces their refuge to an intricate network of underground tunnels. Felix manages to catch up with the cat nevertheless just as Puff is snatched from the sky by a Great Horned Owl named Obadiah.
Later on—two hunters disable the wise owl forcing Puff to continue his journey alone as the relentless fox catches up with the cat one last time. Puff manages to escape by leaping in face-paced rapids that carry him quickly to the most treacherous falls of all. Attempting to save Puff before he reaches the falls, the otters gain help from a large black bear named Boaz as they ascend the cliffs near the base of the falls while Jumper approaches from upstream. Obadiah manages to lift Puff from the turbulent waves to a rock in the middle of the stream just as a golden eagle named Erastus tries to steal Puff away.
Finally overcoming Obadiah, Erastus attempts to snatch Puff from Jumpers rescue and, in the confusion, Puff is tossed into the gushing torrents that push him over the falls.
Will Puff survive such a deadly descent and, if he does, how will he ever find his way home?