David Lee is twelve years old and disappointed in his father Earl, a once-famous rodeo clown, who has quit the circuit and moved David to a small town in Vermont to start a new life. David has a hard time adjusting to life as a "normal" boy - going to school every day, living in a real house, and other parts of living outside of the rodeo crowd. Furthermore, David is also deeply hurt that his father never fulfilled a long-standing promise to him: that he would one day join Earl in the arena as his partner. Becoming more and more withdrawn, David refuses to acknowledge his dad's attempt to buy him a horse for his thirteenth birthday, even though he has fallen in love with the dirty chestnut mare at the auction. David believes that by faking interest in the horse that he is, in a sense, getting even with his father. However, the mare is sold to a seventy-year-old widow named Sarah Tierney. Sarah is still grieving the death of her husband and to try to fill the gap in her life, she remembers a childhood fantasy she once had of owning a horse.Sarah knows nothing about horses, however, and enlists the help of Earl-and David-to teach her how to ride and care for her newest addition, Gypsy. As the three of them spend more and more time with Gypsy, they all become entranced - in their own ways - by the horse and begin to learn more and more about themselves.