Jack and Annie travel to a monastery in the Swiss Alps where, with the help of St. Bernard dogs and magic, they seek the second of four special objects necessary to break the spell on the wizard Merlin's beloved penguin, Penny.
Jack and Annie continue to try helping Merlin the magician by searching for the secrets of happiness, and their magic tree house takes them to Antarctica, a wasteland where the penguins may know what to do.
The Magic tree hous takes Jack and Annie to San Francisco in 1906, in time for then to experience the biggest earthquakes the United States had ever known.