Plot

The original cast of "Father Knows Best" returns for the second reunion movie. After learning that none of the children will be home for Christmas, Jim and Margaret decide to sell their house.

Jim Anderson arrives home to find Margaret in the attic sorting through the Christmas decorations. They reminisce about past holidays, including the quarrel between Kathy and Aunt Neva that nearly ruined Christmas. Their realtor friend Louise stops by to see if they've ever considered selling the house. Jim tells her they aren't interested but will let her know if they change their minds.

Although they haven't heard from the children, Jim and Margaret assume they will be home for Christmas. Their hopes are dashed by a series of phone calls. Bud is searching for a new place to move his business and Jeanne hasn't heard from him in over a week. Betty and her airline pilot fiance Frank are taking the girls to London for Christmas. Kathy and her doctor boyfriend Jason are going skiing.

While shopping for gifts, Margaret becomes depressed at the sight of children sitting on Santa's knee in the store. She speaks wistfully of wanting to take her grandchildren to see Santa. The dollhouse they considered buying for Betty's daughters has been sold. At that point, Margaret decides they should sell their house. She finally accepts that the children have their own lives now.

Louise warns them that the house will sell quickly and asks about their future plans. They don't have any, although Jim suggests they get an RV and travel around the country. He correctly predicts that once the house is on the market, the children will decide to come home after all.

Frank calls with a change in plan. He wants to leave Ellen and Jenny with Jim and Margaret for a few days. Betty is in Milwaukee on business. She and Frank will meet in Chicago on Christmas Eve and travel to Springfield. Then Bud, Jeanne and Robbie call to say they are on their way. Betty unexpectedly arrives but without Frank. He had to fly to Rome but will still be there on Christmas Eve as planned. Kathy and Jason cancel their ski trip after he breaks his ankle.

Jim and Margaret announce that they are selling the house. Betty thinks it's a good idea but Bud and Kathy aren't happy about it. Bud confides in his father that he and Jeanne are still having marital problems. He doesn't know what would make her happy. Jim suggests that he ask her.

Since they have guests, Jim asks Louise to put off showing the house until after Christmas. But an interested buyer and his family are already enroute and she has no way to contact them.

Robbie, Ellen, and Jenny are sailing boats in the kitchen sink. They leave with Jim to buy a Christmas tree, forgetting to turn off the water. Margaret goes to wash her hair, leaving Kathy to answer the door. Louise is there with the family who might buy the house. Kathy notices water seeping from the kitchen and discovers the sink has overflowed. She cleans up while Louise shows the family around. Later, Margaret finds her in tears. She doesn't want her parents to sell their house because it is home. Margaret comforts her and says that home is wherever she and Jim are.

Jeanne tells Bud that she is tired of living in an apartment. She wants a house like the one his parents have, a place where she can put down roots.

Jim reminisces about the Christmas Eve that the family went to buy a tree and got stranded in the snow. They took shelter for the night in an old lodge, deserted except for a mysterious elderly caretaker. A film clip from the original episode shows Kathy in tears because Santa won't know where to find them. But with the old man's help, the Andersons decorate a tree. The next morning Kathy sees a bearded man with a sack feeding what she mistakes for a reindeer because it has antlers. She thinks Santa has come, not knowing that it is actually the caretaker feeding the deer that live in the forest. Her family assures her that their gifts are waiting at home.

Frank does not arrive on schedule. The Andersons learn that he missed the last flight to Springfield and borrowed a small plane to fly himself there. But with snow rapidly making flying conditions dangerous, Betty becomes frantic. Jim calls the airport and learns that they lost contact with Frank. He eventually arrives, having been forced to land near a farmhouse. The elderly man who lives there was once a pilot and turned on his truck lights so Frank could see to land. Then he insisted on driving Frank to Springfield. Frank discovers he has mistakenly picked up a gift from the old man's truck. When the old man comes back for it, the Andersons are startled to see that he bears a strong resemblance to the caretaker who gave them shelter all those years ago.

On Christmas morning, Jim announces that the house has been sold. While the family expresses their disappointment, Bud says he is the one who bought it, as a surprise for Jeanne. Everyone is delighted that the house will stay in the family but there is still the question of where Jim and Margaret will go.

Some weeks later, Jim and Margaret bid goodbye to Bud and his family. They climb into an RV and drive away to further adventures.