The next morning Norman is the one to discover that their prize pigs, which will be sold for money for their tractor gas, or for it to be repaired, have escaped. Norman and his siblings eventually persuade the Gray Cousins to join them in finding them (albeit half-heartedly). They find them but Nanny McPhee creates a game of finding them, and the children chase the piglets up trees and down a stream. By working together, Norman and Cyril devise a plan to catch them using their mother's wedding veil. The children apologize to Isabel, their mother, but manage to retrieve the money they need for their tractor.
The next day they go on a picnic when Uncle Phil Green arrives with a telegram reading that Rory Green is dead, which would mean that the Green family has been waiting in vain for his return. The family is devastated, Norman most of all, however it is his belief that his father is alive, a "feeling in his bones" he appears to have inherited from his father. He then remembers that if Rory is dead, Isabel will sell the farm. So he and Cyril (now on the same side of the fence) decide that they need proof, as Cyril's father, Lord Gray, is a high ranking official in the War Office in London.
With Nanny McPhee's help (and motorcycle) the two travel to London and arrive at the War Office. At first they are blocked by a guard who tells them to leave if they cannot prove Lord Gray is Cyril's father. However upon recognizing Nanny McPhee, the guard escorts them up to Lord Gray's office. The stern Lord Gray reproaches the boys from interrupting his work and the fact that they doubt the accuracy of the War Office without proof that Rory is alive (such as a communication, like a letter after the telegram's time stamp). But the boys implore that he find out seeing as they are family. Lord Gray reminds the boys that there are thousands of men fighting for Britain and that he should not give one man his special attention. He see the request as ridiculous, and that this is something that his "weak-willed son" (Cyril) would go along with, to which Norman defends him. But his Lordship is unmoved: When Lord Gray asks why he should stop everything he's doing for one man, Norman falters, understanding how selfish and childish he must sound to his Lordship, but Cyril firmly defends him by saying that just because Lord and Lady Gray's home and marriage are destroyed doesn't mean he should stand aside and allow for Rory and Isabel to fall apart. With his pride hurt, Lord Gray goes to investigate Rory.
Norman then asks Cyril if his parents are really divorcing, and comforts the latter when Cyril claims it's true. He even offers that Cyril and his sister, Celia, live with them. Moments later, Lord Gray arrives and informs the boys that their father has not been killed in action but is in fact M.I.A., missing in action. At first Norman is confused, then overjoyed to learn his father is alive. He then inquires after the telegram sent to them, but his Lordship claims the telegram is obviously false and that there is no record of any telegram having been sent to them. The boys hurry back to Nanny McPhee and deduce that the telegram was falsified. Norman correctly guesses that Phil Green, Rory's brother, betrayed them to sell the farm.
As they travel back to the Green farm, Nanny McPhee senses that her help is needed and asks Norman to bang her walking stick on the road. He then asks how fast can her motorcycle go and they zip back to the farm where they reveal Phil's deception. Fortunately they arrive in time, but unfortunately a U.X.B. (un-exploded bomb) has landed in their barley field. Mr. Docherty attempts to disarm it but his strength fails him. It is up to the children to disarm the bomb. Norman assists Megsie in disarming both their attempts to disarm it. Mr. Edelweiss, a mischievous bird, is about to explode from consuming the putty in the U.X.B. and the Green and Grays take cover as Nanny McPhee "deals with it."
Mr. Edelweiss belches and the barley is collected and the family watches as Nanny McPhee displays a sort of "fireworks" show before all of the barley is collected and the harvest is in. They family them plays on a slide and Nanny McPhee leaves, but not before the children realizes that the family is wearing Nanny McPhee's medals, they soon discover she is leaving and attempt to chase her back down claiming they need her, but Rory Green has returned and therefore they do not. As the movie ends, Norman is the first to hug his father and introduces their cousins to them where it is assumed they all lived together as a family, whole again.