Sarah Lucas' anxious father, the wealthy industrialist Hindmarsh, arrives at Crockers Gully to persuade her to return to England with him - the two had been somewhat estranged as he had not approves of Sarah's late husband. During Hindmarsh's journey to the goldfields he is attacked by a bushranger, but manages to escape after shooting his assailant in the shoulder. The bushranger turns out to be Richard Lucas, Sarah's brother-in-law, who has lived the life of an outlaw since he avoided arrest back when Sarah first arrived at Crockers Gully. Sarah convinces her father that she wishes to remain in Australia, and her relationship with McKellar improves and they become engaged, with McKellar intending to marry Sarah and leave the police force.

Lay preacher George Williams and Richard Lucas are vainly trying to muster support for miners' rights when news comes of the discovery of a large gold nugget. Constable Colvin has been assigned to escort Gold Commissioner Edmund Fitzalan, newly arrived from India, to the Crockers Gully goldfields. Fitzalan's duties overlap those of the Sergeant of Troopers, Robert McKellar, and there is an ill-disguised hostility between them due to their differing backgrounds. Fitzalan was impressed by Const. Colvin, newly appointed to McKellar's detachment, and appoints him as his orderly. Colvin, a notorious police spy despised by everyone, falls out of favour with Fitzalan when he is found drunk after making advances on Mary Dwyer, the proprietor of a sly grog tent. Also arriving on the goldfields is English lady Sarah Lucas, whose first duty is to bury her husband who died on the voyage to Australia.

Sgt. McKellar cautions three notorious troublemakers, Watson, O'Toole and Jones, who hire an Aboriginal worker, Wongerra, to guide them to the new gold find at Ben-Ga-Dee Creek in return for a few bottles of spirits. Jones suspects that Wongerra is taking them on a wild goose chase and tortures Wongerra, leaving him tied to a tree. He is found by Sgt. McKellar, but it is too late to save his life. Comm. Fitzalan is determined that the troublemakers will be brought to justice.

Hard working miner Mick Draper has done well at the diggings, and plans to form a partnership with his friend Jim Hill. However things do not turn out that way when Hill talks Draper into trying for quicker gains by robbing the mail coach. They get away with their loot, but never savour success. Meanwhile, Mick's wife Amy joins Jim's wife Jessie in drinking at the Miners Pub.

English prize fighter Gentleman Jim Dawson comes to the goldfields with two friends, Symons and Green, supposedly to pan for gold. Instead, they intend to cheat the miners by getting them to bet on Gentleman Jim when a fight is staged - and rigged - with one of the local toughs, Peter Hackett. The miner's anger is aroused when Comm. Fitzalan orders that the fight be held in a closed tent with only himself and selected guests present. Sgt. McKellar has to act swiftly in order to prevent a riot, and the ensuing action provides an opportunity for a wandering priest, in whose care the bets have been entrusted, to sneak away with the money.

Gold Commissioner Fitzalan unwittingly instigates another disturbance on the Crockers Gully goldfields when he appoints Dr. Kirby as a temporary teacher. Dr. Kirby's appointment is opposed by the Reverend Smith, who is anxious to safeguard the children of Crockers Gully from what he considers to be Dr. Kirby's subversive teachings. The hostility between the two sparks off a riot among the miners.

Peter Shaw-Jones, an asthmatic young son of English landed gentry, comes to Crockers Gully to seek his fortune. Unused to hard physical labour, he is overwhelmed by the rigours of prospecting and decides to return to England, but his pleas for financial assistance go unheeded by Commissioner Fitzalan. Desperate and ill, Shaw-Jones risks going down a mine at night and is trapped in a cave-in.

When Brendan O'Hara is wrongly accused of failure to hold a miner's licence, Fitzalan refuses to believe the story. Later O'Hara is elected as the people's commissioner, and Fitzalan resorts to sly tactics to maintain control over the goldfields.

When a fever epidemic sweeps Crockers Gully, young Jessie Smith's father dies, and Sarah takes the girl to see the Reverend Mr. Fisher. He suggests that Jessie should stay with with Miss Hawk of 'Ilangi', for whom he has the highest regard. When Miss hawk's sheep are infected with scab and need dipping, she asks Comm. Fitzalan to led her some diggers.

Peggy O'Shea, the Irish lark, arrives at Crockers Gully to prepare for her tour of the gold fields. Other new arrivals are a Chinese family who are befriended by Sarah Lucas. Sarah suggests that their 18-year-old daughter Yin Soong becomes Fitzalan's housekeeper. The Gully doctor calls unexpectedly on Fitzalan, and notices a tender relationship blossoming between the two. Yin Soong falls in love with her employer, and Fitzalan fears that soon the whole camp will know of his affair, and that the miners will not take kindly to her.

Jones and Brady have been chained to a tree while awaiting trial, but they break free and go bush. They take over a tent belonging to a couple of prospectors, killing one and injuring the other, while planning their next big robbery. Later, Fitzalan and his party, who are travelling from Melbourne with a valuable consignment, are awaiting a police escort at the Welcome Nugget Inn when Jones and Brady burst in. They hold Fitzalan's party at gunpoint, wreak havoc at the inn and take Sarah hostage before Sgt. McKellar arrives with the police escort.

A badly wounded Aboriginal girl, Werowey, is brought to Dr. Woods. Sarah offers to care for her, and Williams is sympathetic and worried for Werowey, but Lansdowne and Fitzalan consider all Aboriginals are savages. Their opinion is reinforced when miner Withers is brought in dead. McKellar is sent by Fitzalan to hunt the killers, and he and his men come upon the remains of an Aboriginal camp where white men killed the other Aboriginals and took their women. Determined to release the Aboriginals, McKellar refuses to handcuff them and they escape. He returns to Crockers Gully to face Fitzalan's wrath.