The brushtail possum, described as being "as big as a fat cat" went on a two-hour rampage after attacking a friend of the family, then bailing up the mother and her two children in a car.
The woman, Andrea Norris, was forced to call police for help after she was unable to contact wildlife officers.
"When I got out of the car it took off after me. I was stuck in the car with two of my kids. The possum was sitting near the car just waiting for me to get out," she said.
Ms Norris was unable to reach Department of Sustainability and Environment wildlife officers without success so she called Warrnambool police.
"They walked straight up and capsicum sprayed the possum. Unfortunately, at the same time I wound down the car window and we all got a dose as well and spent the night coughing. Then police grabbed one of the kids' toy rake and chased the possum away."