When upper class English girl Penelope Townes finds a magic opal which contains two Australian genies, Bruce and his son Baz, she thinks all her problems are over and that she can have anything she wants. Bruce, however, has other ideas.

Tour operator, Otto von Meister and his nephew, Conrad arrive at Townes Downs with a load of tourists. When he learns about the opal, Otto recalls that it belonged to their family years before and he and Conrad are desperate to get it back.

Bruce wants to become human but to do this he must take the opal to the cave where it was mined over a hundred years before. He sets out to trick Penelope into visiting the cave.

Penelope is desperate to win the Cross Country and she does, without any help from the genies. Penelope wishes that Conrad could see her success. He does, but not quite how Penelope would have liked.

Penelope, Lady Diana and Miss Mossop are arrested by a Customs Officer when they return to England with 20 million pounds provided by the genies. That exact amount has just gone missing from the Royal Mint.

Bruce helps Otto and Conrad get the opal because he thinks they will help him return to Australia. Instead the Von Meisters sell it for 25,000 pounds. It's now up to the genies to sort the mess out.

Penelope is furious when Lady Diana's wish for a holiday in Australia is granted and they are once again at Townes Downs. To punish Lady Diana and Bruce, Penelope wishes her mother and Otto would fall madly in love.

In an effort to stop Bruce continually misinterpreting her wishes, Penelope writes down her perfect wish. All goes well, Penelope is perfect, Lady Diana is rich and Marcia is ugly. However the genies have the last laugh.

Conrad realises something is strange about Bruce and is determined to figure it out, with Baz's supposed help. But everyone else begins thinking Conrad is the odd one out.

Now that Conrad knows Bruce's secret, he decides to work on Baz to pump the information from him and the first thing he does is steal the opal

Returning to England for Marcia's party, Penelope discovers she has to take a catch up exam. Ready to win (with the opal), she attends the party, unaware of what surprises lie ins tore.

Otto and Conrad send two fake opals into circulation causing trouble for all involved.