The first episode takes the audience through a prequel of events which lead up to the two families coming to live together at number 1 Cloudstreet in 1943.

Years have passed, but little has changed. The Lambs are still bustlers, the Pickles do little. Rose's antipathy towards Dolly has grown — particularly when Dolly tells her she has to leave school and get a job. Rose's brother, cheeky little Ted (Dolly's favourite) is now a jockey and a hit with the girls. And Quick Lamb is still looking after his little brain-damaged brother Fish, and still feeling a sense of guilt over the fishing accident in which Fish nearly drowned. Soon, the pressure of those feelings leads him to snap and he walks out of Cloudstreet — despite his mothers orders for him to stay.

Winning moments never last, however, and news arrives from Adelaide that Ted has died of a heart attack in a sauna while trying to lose weight (as jockeys do). Dolly is inconsolable, although she makes renewed attempts to see if alcohol will console her. Rose makes a token effort to comfort her mother, but her fundamental contempt for Dolly makes this impossible. The house is still groaning and suffering — worse than ever. Life is now as divided and dislocated as it will ever be. Rose is, emotionally, as far from her mother and her family as she will ever be. Quick is physically as far from Fish and his family as he will ever be. Oriel is furthest away from the faith she once had. And Sam, as always, is just waiting to see what happens next.