Australia, 1900. Wally King and family (wife Ma, son John and daughter Emma), together with Aboriginal stockman Black Jack, are making a 600-mile trek with their sheep herd to a water hole called Bitter Springs, the area around which has been leased to them for farming by the Government.

Wally needs extra hands and takes on Tommy, a down-on-his-luck British music hall escapologist travelling the outback with his young son Charlie, and Mac, a young carpenter from Scotland.

While traversing desert country, they discover that the water hole on their route is dry. John declares that they must turn back, but Wally opposes this and rides ahead to check the next water hole, only to find that dry too. The general feeling is that they will now have to turn back. However, that same evening, Trooper Ransome, constable of the territory, arrives at their camp, and, on hearing of their plight, tells them where they can dig so as to obtain water.

Staying the night, Ransome informs Wally that Bitter Springs is the tribal home of the Karagani tribe, the local Aborigines, and has been so for over a thousand years. There may therefore be trouble between the settlers and the Aborigines, since the latter cannot move to another water hole, which would be held by another tribe. Wally is nevertheless adamant that "no mob of stone age blacks" is going to prevent him from settling there.

Arriving at Bitter Springs, Wally, with Black Jack acting as interpreter, holds talks with the Karagani. The tribal elders say that they wish to be friends and agree to them staying, although Wally lets them believe that they will only be there for a few days. He also warns the Aborigines to stay away from his sheep. On raised ground above the water hole, the settlers begin to build a cabin under Mac's supervision.

When the Karagani kill two sheep for food in retaliation for John shooting a kangaroo, the King family, despite Mac's protestations, head to the Karagani camp armed with their guns. When the tribe are found in possession of one of the sheep, Wally takes it away from them. One of the Aborigines raises his spear but John shoots him dead. Ransome arrives and tries to calm the situation, and the Karagani, now joined by Black Jack, depart the scene carrying the dead man.

The following day, two members of the Karagani approach the cabin with the intention of setting it ablaze. They find Charlie as the sole occupant. In a struggle with the child, an oil lamp is knocked over, starting a fire in the cabin. The Aborigines run away taking Charlie with them.

With the cabin ablaze, Tommy goes in search of Charlie, while Wally confronts the Karagani and tells them, accompanied by a demonstration of their firepower, to leave the Bitter Springs area. Tommy sees Charlie with a group of the Karagani and tries to rescue him but is taken captive himself. The Karagani take Tommy and Charlie with them as they move to another water hole, where they are confronted by another tribe.

Thanks to Black Jack's translation, Tommy learns that the two tribes are to band together to drive out the white settlers. With the help of Black Jack, Tommy and Charlie escape from their Karagani guards and all three set off towards the distant camp of Trooper Ransome to raise the alarm.

The King family and Mac are besieged in the remains of their cabin while the Aborigines guard the water hole, preventing the settlers from using it. With Ma ailing through lack of water, John attempts to collect water when everyone is asleep during the night, but is wounded when speared in the back.

Ransome and his troopers, together with Tommy, Charlie and Black Jack, arrive and drive the Aborigines away from the water hole. Ransome has orders to remove the Karagani from the area, but Wally, having learnt that conflict provides no answers, decides to try and work with the tribe to find a suitable resolution. The Karagani, now in western dress, work for the King family on their sheep farm.