Being teased for his color, Johnny the white koala joins a traveling carnival with Hamish, a Tasmanian devil, and Higgens, a photographer monkey as talent agents. On the way through the Australian outback desert, the trailer they are in comes loose and crashes. Johnny must live up to the hero status Hamish presents him as while the outback locals try to rescue a kidnapped koala from Bog, a giant crocodile and his dingo lackeys.
In the outback of Australia, the coward white koala Johnny is bullied by the other animals because of his color. When Johnny meets the Tasmanian devil Hamish and his friend, the mute photographer monkey Higgens, he is invited to join a traveling circus and Johnny leaves the wilderness to be an attraction in the sideshow. While traveling to Precipice Lake, the wagon car of Johnny, Hamish and Higgens releases from the train and they crash in the desert. They walk together to the new location and stumbles with an oasis with a billabong, and they see a pack of dingoes attacking the animals. Johnny accidentally frightens the wild dogs that return to their boss, the evil crocodile Bog in Precipice Lake and Hamish introduces Johnny bragging that he is hero The Koala Kid. They are welcomed by the locals and Johnny is worshiped by the little Charlotte despite the disbelief of her sister Miranda. But when Charlotte is wrongly kidnapped by the dingoes, Johnny has to prove to himself that he can beat Bog and rescue Charlotte.
- A white koala named Johnny is teased about his color so he joins a traveling circus with the help of Hamish, a Tasmanian Devil, and a Higgens, a monkey photographer. He is disappointed that he is part of the freak show instead of the main acts in the big tent. The top act is "Wild Bushman" who takes all the audience from the freak show. Johnny checks out the act and ends up part of the act by accident and saved by The Wild Bushman. While traveling to a new location Their wagon train car becomes unattached and crashes in the desert of "The Outback". On their quest to go to the next location of the traveling circus, "Precipice Lake", they come upon a billabong, the oasis of the Outback. They witness from their cliff location that a pack of dingos (and a thylacine) are chasing a bilby but rescued by a kangaroo, a wombat army, and a vine-swinging female koala talented at throwing a boomerang. Boris, a vulture, reveals that Bog intends on taking over the Billabong. When their rescue goes wrong and the dingos threaten to take over, the rock Johnny is on breaks free and he slides down the cliff and ends up rolling on top of a boulder that chases the dingos away. Hamish introduces the now-famous white koala as "Koala Kid". Miranda, the boomerang expert koala, is not impressed but Johnny watches her from a tree as she practices. When noticed, Miranda breaks the branch he is on with her boomerang and complains about him watching in secret. He tries to lie his way out of that accusation but ends up suggesting he is an expert at the boomerang... and proven wrong when offered to try it himself. Hamish's plan is to take photos of Johnny doing heroic stuff and make him famous as Koala Kid so when they get back to the circus, they can get in the main act rather then the freak show (Hamish will make more money). Bog, a giant crocodile, is not impressed with his gang getting chased by a koala so orders them to capture Koala Kid. In the chase, Miranda's younger sister Charlotte gets covered with cosmetic powder and mistaken for the Koala Kid and kidnapped. The Billabong residents plan to rescue Charlotte but must cross the dangerous "Bungle Bungles" on their way to Precipice Lake. This convinces Hamish to go along with Johnny's conscience and join in the team to rescue Charlotte. During the trip, Johnny accidentally saves the day a few times but Miranda is still not impressed. Johnny and Miranda fall into a sinkhole and tell the rest of them go on ahead. They are being hunted by a giant lizard with a thorn in it's foot. Johnny saves Miranda but soon realizes the lizard is suffering and pulls out the thorn. The lizard becomes friends with Johnny and the two koalas ride it out of the caves. Just as Miranda starts to take a liking to Johnny, Boris the vulture reveals that Johnny is just a freak show act and the "Koala Kid" thing is just a lie. Miranda tells him to leave but finds out that the gang will need to bring a koala to Bog instead of the real Koala Kid and Charlotte will have to do. Miranda offers to take her place. The released Charlotte goes to find Johnny while the kangaroo and the wombat army manage to distract and capture all the gang but the vulture. Charlotte finds Johnny along with Hamish, Higgens and a prophetic peb-leg wombat and they decide to finally help Johnny get what he really wants, Miranda. Johnny calls the lizard he helped and rides off and saves Miranda. Bog shows up and gives chase so they head to the circus hoping the Wild Bushman will be able to tame Bog. Bog proves too powerful until Johnny uses the boomerang to bring down the big top on top of Bog (and himself). Johnny and Miranda (and the befriended lizard) become the main attraction and the bad guys get sold as pets. Johnny asks Miranda if she likes her new life and she is not so sure. Plan B is they ride off into the sunset together.