As our story begins, Nurse Moppet is on her way to the castle of the wicked Sheriff of Nottingham. She brings with her a letter and Betty and Bobby, the children of the Sheriff's late departed brother, who has requested that the children should be brought up by the Sheriff.
Unfortunately, on her way Nurse Moppet loses the children in the forest. Robin discovers them and returns them to the castle where he meets Maid Marion and gives her a medallion as a token of his love.
Meanwhile, the Sheriff encounters the Demon Imp who tells him that the letter brought by Nurse Moppet contains important information concerning the Babes and he realises he must dispose of Betty and Bobby. He employs Bert and Fred, two robbers, to help him perform the task.
As the Babes settle into the castle they are visited by Fairy Sparkle who unfortunately leaves her ward in their bedroom. They wrap up their precious parcel and carry it wherever they go.
The Demon retrieves the letter and Marion, who has read it, realises the Babes are in danger. Simon, Moppet and Marion decide to keep the Babes away from the castle and take them to the forest for a picnic.
After much confusion, the Babes having been captured by Fred and Bert, finally escape with the help of the Fairy and spend the night in the forest. The next day they return to the castle where it is discovered that the medallion, which Robin has given to Marion, carries the same design as the crest of the Sheriff's Charter of Rights, thus confirming Robin as the true Sheriff of Nottingham.
The Fairy, having had her wand returned to her, ensures that all will end happily.