In 1931, two sisters, 14-year-old Molly and 8-year-old Daisy, along with their 10-year-old cousin Gracie, find themselves living in the remote town of Jigalong, located in Western Australia. This town is positioned along the northern section of the rabbit-proof fence, also known as Number One Fence, which stretches over a thousand miles across the country.
Meanwhile, in Perth, over a thousand miles away, the Protector of Western Australian Aborigines, A. O. Neville, often referred to as "Mr. Devil," authorizes an order to relocate these young girls to the Moore River Native Settlement. He refers to the girls as "half-castes," a term used for those with Aboriginal mothers and white fathers. In his misguided belief, Neville sees the Aboriginal people as a danger to themselves, and he is determined to ensure that the "half-castes" are bred out of existence. His plans include placing the girls in a camp where they would grow up, training them to serve as laborers and housemaids for white families, presumed to lead to eventual intermarriage and, consequently, the dilution of Aboriginal heritage within society.
The three girls are forcefully taken from their families in Jigalong by local constable Riggs and sent to the Moore River Native Settlement, situated about 90 km (55 miles) north of Perth.
At the settlement, the girls endure life in a large dormitory alongside numerous other children, tightly regulated by nuns. They are forbidden from speaking their native language and are coerced into performing Christian prayers, facing corporal punishment for any infraction against the camp's harsh rules. Attempts to escape are met with severe consequences. During an approaching thunderstorm that could cover their escape, Molly takes on the leadership role and persuades the girls to flee and find their way back home.
As they embark on their perilous journey, the girls are relentlessly tracked down by Moodoo, an Aboriginal tracker assigned to the camp. They eventually locate the rabbit-proof fence, a guide that will lead them toward home. Following this fence for several months, they narrowly avoid capture time after time. Meanwhile, Neville spreads rumors that Gracie's mother awaits her in the town of Wiluna. This misinformation reaches an Aboriginal traveler who deceives the girls.
He assures Gracie that they can reach Wiluna by train, prompting her to break away from her sisters in an effort to catch the train. Molly and Daisy pursue her and find her at the train station, but their reunion is short-lived as Riggs reappears and swiftly recaptures Gracie. The betrayal unfolds as Riggs reveals to the traveler that he will be rewarded with a shilling for his part in this deception.
Recognizing their inability to save Gracie, Molly and Daisy persist on their journey. Ultimately, after an arduous nine-week trek through the unforgiving Australian outback, they manage to cover an impressive 1,600 km (990 miles) along the fence, finally returning home to find refuge in the desert with their mother and grandmother. Meanwhile, Neville comes to the grim realization that he can no longer sustain the search for Molly and Daisy, prompting him to call it off.