In 1932, during the dark days of the Great Depression, Charlie Davis, from the inner Sydney suburb of Newtown, is laid off from work. When he can no longer pay the rent, his family establishes a dwelling in a shanty town called Happy Valley, near Le Perouse on Sydney''s eastern fringe. To make ends meet, Charlie and his son, Tom, follow in the footsteps of the original ''rabbitohs'' who had already earned a place in Sydney''s folklore, and they traipse the streets selling rabbits.  

          During his days as a rabbitoh, Tom befriends a young Irish girl Hazel, and to the horror of her Catholic family, she becomes pregnant. With her infant, she joins Tom and his family at Happy Valley, but struggles in the dour conditions. She flees Happy Valley, deserting her baby Bill, knowing that she is now carrying another child.

          She seeks refuge in a cold and cruel institution for unmarried, pregnant girls and does what she needs to do, so she can have a life with her baby daughter, Nancy.

          Eight years later in 1940, both Tom and his father, Charlie, take their place in the theatre of war. When the war is over, Tom is reunited with his mother and young son, Bill. Tom begins his search for Hazel. When the search proves successful, both Tom and Hazel agree to hide their history, not wanting their son, Bill, to learn of his abandonment as a baby.  Tom is introduced to Nancy as an old friend that her mother knew from before the war. 

          Thrown together as stepsiblings, Bill and Nancy see nothing shameful in the romantic chemistry that exists between them, unaware that they are full siblings. When eventually Bill finds out that Nancy is his biological sister, he does what he can to distance himself from her, though by this time she is already pregnant. He sets up Nancy in a nearby suburb and manipulates the situation so that a neighbour, Mrs Green, becomes the carer of their developmentally delayed son, Leon. She becomes the child''s ''ma''.