Mickey comes to a small village in the mountains and stops to have lunch when he overhears an old man and his wife having a worried discussion. When he asks them what's wrong, they explain to him that they have owned a small sheep farm nearby for many years, and they often hired young men from the village to tend the sheep, but for the past ten years, they have been disappearing. The couple tell Mickey that it is presumed to be the work of a wicked troll who lives at the edge of the forest right near the farm. As a result of these mysterious disappearances, no one will look after their sheep, and they may lose their farm, so Mickey volunteers to take care of the sheep until they find someone else to tend them. As the couple shows Mickey around their farm, he notices some oddly-shaped trees at the edge of the meadow.
The next morning, Mickey goes off to tend to the sheep, bringing the old man's homemade wooden staff. That afternoon, after eating lunch, Mickey wishes he had some water to drink, at which point a well suddenly appears in front of him. When he tries to get a pail of water out of the well, he accidentally drops the wooden staff into the well. Just then, the troll shows up and orders Mickey to go away, thinking the mouse is after his treasure. But Mickey says he just wants the wooden staff back, so the troll dives into the well, claiming he'll retrieve it. He returns with a bronze metal staff, then a silver staff, and finally a golden jewel-encrusted staff, but each time, Mickey tells him that none of those are the ones he wants. This angers the troll more and more until he and the well eventually disappear.
Once the troll vanishes, the odd-looking trees Mickey noticed earlier are transformed back into the young men who had tended to the sheep before. As it turned out, they'd all been turned into trees by the troll because they foolishly agreed to take the staffs the troll offered them. After the villagers return to their homes, Mickey explains to the old couple what happens. He also gives them the three staffs the troll tried to tempt him with, saying they can sell them get enough money to save their farm.