The Fair-Haired Hare was the first short released in which Yosemite Sam was drawn with his mouth in his red mustache for the entire film. It is also one of the few cartoons where Sam refers to Bugs by name.
Bugs Bunny — contentedly singing "Home on the Range," adding in that rabbits also live on the prairie — is startled after Yosemite Sam builds a cabin above his rabbit hole. Bugs tries to find out what's going on, interrupting Sam's banjo rendition of "Git Along, Little Dogies"; Sam attributes this disturbance to mice. Bugs saws a hole and climbs out through a bearskin rug, causing the bunny to panic; Sam shoots the rug repeatedly ("Playin' possum for 20 years! That'll learn ya!"). The two then begin quarreling over who has rights to the property; Bugs claims he was there first and should live there undisturbed, while Sam isn't interested in listening to a rabbit's opinion.
Bugs decides this may be a civil matter and decides to go to "the highest court in the land" — which they do: It's literally the "highest court" in the land, the courthouse being atop a mountain. There, the judge declares that both Bugs and Sam shall share the land equally ... "and in the event that one of you should pass on, the other shall inherit the entire property." Sam chuckles evily, making Bugs uneasy.
The rest of the cartoon sees Sam trying to kill Bugs, but all of his schemes go awry:
- That night, the two bunk in the same bedroom, their beds on opposite sides of a window. After Sam turns out the light ("Good night, varmint!", "Uh, good night."), Sam tries to sneak over to Bugs' bed to klonk him on the head. Bugs turns on the light in time, causing Sam to make the hasty excuse, "Carpet keeps rolling up! Good night, critter!" (he does this as he pretends to bang the floor). Sam makes a second attempt, and indeed someone does suffer a concussion — Sam, as Bugs has hit his antagonist on the head ("There, that oughta keep that carpet flat!", "Good night, varmint, critter!").
- At breakfast, Sam tries slipping a Mickey Finn into Bugs' carrot juice (while Bugs is in the bathroom). However, Bugs is wise and trades the drug-laced drink with Sam's. When Sam refuses, Bugs plays a game of roulette ("Round she goes!"). Sam loses his patience and orders Bugs to drink at gunpoint. Bugs does, but only after Sam drinks his. Nothing happens to Bugs, making Sam realize that he has consumed the poisoned drink — moments before he blasts off into the sky.
Sam runs back and immediately chases Bugs back into his hole. He then realizes the only way to kill off the rabbit is to pack his hole with explosives. However, Bugs diverts the dynamite under the house foundation. Sam then lights the fuse, but realizes too late that his house is about to be blown up. In the end, the cabin flies away, much like how the cabin did in the tornado in the 1939 film adaptation of The Wizard of Oz. A dazed Sam, upon realizing his fate, remarks, "I've got a cabin in the sky!" (a reference to the 1943 MGM film of the same title), as his house floats upward.
- The version of this cartoon that aired on ABC's The Bugs Bunny and Tweety Show cut the part where Bugs gets stuck in a bearskin rug and Sam shoots at it to release Bugs .
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