Snow-White, fair-haired, quiet, and shy, and Rose-Red, dark-haired, outspoken, and lively, are two little girls living with their mother in a small cottage by the woods. They give shelter on a winter night to a kindly bear, who treats them gently and returns every night.

In the summer, the girls encounter a wicked dwarf whose beard is stuck in a tree. Freeing the dwarf, the girls are met with loud ungrateful recriminations for cutting his beard. More episodes of rescuing the dwarf from various perils transpire in a similar fashion. In the end, the bear comes to aid of the girls.