Proceed right.
Enter the blue building (which looks like a muchroom covering a door) and collect the construction potion. The red building contains an extra life, and the green building contains the next section.
Waterfall[edit]
Drop down in the green building, and go left to collect the key. Proceed right and down and open the door. Use the construction potion to build a bridge. Collect the apple.
Return to the entrance and exit to the right.
Avoid the falling apples, then use the magic apple on the barrel. Push it to the right, then jump into it.
Exit[edit]
The red building to the left has a 1up.
Continue left, climb the rope, and jump down the steps. Enter the first open green building, and jump across the platforms to push a springboard outside. Exit, and launch via the springboard to reach the upper section. Head left to exit the level.