It is Christmas time and Jesse is trying to think of a gift he can give to Leslie. He wants to make sure it is something special, because she is special to him and feels more like a sister to him than his own sisters do.

He is out of ideas, until he spots a sign advertising free puppies. He brings home one of the puppies and presents him to Leslie on Christmas Eve, at their secret place, Terabithia. She immediately falls in love with the dog, naming him Prince Terrien. She makes him the guardian of Terabithia, but the dog proves to be more clown than guard.

Leslie gives Jesse a box of watercolors, three paint brushes, and a pad of art paper making it a perfect Christmas for him.

Back at home, Christmas day is not so perfect, because Brenda and Joyce Ann are not happy with their gifts, Dad is upset his gift to Jesse is not working right, and Momma is complaining again. She feels the only child who cares for her is Ellie. These situations leave a pall over the day for Jesse, until Leslie sneaks over to visit him, while he is milking the cow. Her visit makes the day feel festive again for him.

After Christmas, Leslie starts to spend more time with her father, helping him renovate their house. Jesse becomes jealous of the time she spends with her dad, but after a while he joins them. They enjoy their time together and in the process, renovate the living room.

A few months later, Leslie tells Jesse she has heard Janice Avery crying in the girls' restroom. Leslie doesn't want to have anything to do with Janice, but Jesse thinks they should try to find out what is wrong. Leslie finally gives in and goes back to the restroom to talk to Janice. Jess is afraid Janice will hit Leslie, but Leslie returns to class unhurt.

She tells him later, that Janice's father beats her. Jess says a lot of dads do that. The problem for Janice is she told her friends and they told everyone at school. Leslie's advice to her is to pretend they are making up the story. She lets Janice know the problem at school will soon blow over. In the process of giving Janice advice, Leslie gained a sort of friend. She tells Jesse she now has one and a half friends. This makes her happy and Jesse a little sad for her, because she feels lonely.

That night May Belle tells Jesse she knows about Terabithia. He makes her promise not to tell anyone, but he worries she will blab the information.

Easter is fast approaching, which makes Brenda and Ellie nervous, because they have nothing to wear to church. Their mother is about to take all the children clothes shopping when Dad returns home early from work. He has been laid off, which means no new clothes and the family is going to have to figure out how to live without his income.

Jesse escapes from the wails of the girls to the shed, so he can milk the cow in peace and quiet. Leslie finds him there and learns of the crisis in Jesse's family. She commiserates with him, then she asks him if she can go to church with his family on Easter. She has never been to a church and would like to experience a service for herself.

Jesse's momma allows Leslie to accompany them, if she doesn't look down on them for being poor. Jesse assures her that will not happen. Easter day, a properly dressed Leslie is respectful to Momma.

After the service, she tells Jesse she found it beautiful, even though she doesn't believe in God. May Belle can't believe she doesn't believe in God, because she will go to hell then. Leslie thinks this is the most absurd idea she has ever heard, but May Belle wants to know what will happen to Leslie if she dies.

On Easter Monday, the rains begin again, it has been an unusually wet March and it is getting wetter, which makes Leslie and Jesse bored. They want to go to Terabithia, but think they can't because of the rain. Then Jesse suggests they go despite the rain. Leslie likes the idea and after gathering some raincoats they set out, with the dog, for Terabithia.

Once they arrive at the creek, they see it is up past its banks. The creek is wider than they have ever seen it before, but Leslie insists they cross it using the rope. Jesse is not thrilled at the prospect of crossing the swollen creek, but he is not about to hang back and let a girl leave him behind. He manages to make it across and they do so for the next two days. On Wednesday, as they are sitting in their castle, the rain begins to pour hard streaming through its roof. It is cold and all Jesse wants it to be warm and dry again. He is not fond of crossing the creek as it becomes fuller and fuller of rapidly running water, but he doesn't want Leslie to know he is afraid either, so he keeps up with her.

That night, he listens to the rain coming down on the roof above his bedroom with dread, because he knows the next day Leslie will want to cross the creek into Terabithia. He wishes he had more courage, but he realizes it is his main weakness. He is not a brave young man.

Jesse and Leslie courageously face life together. She, at his urging, talks to the crying school bully and makes her a friend. Jesse, faces his fear of the swollen creek, so he will not look weak in Leslie's eyes. They learn more about each other and find out what friendship really means.