His owner, Bronwyn Anderson, said he had gone for a wander near the family home on Boxing Day.
The Andersons were distraught when they could not find 3-month-old Max, thinking he had been hit by a car.
But he had been picked up by another family, from Corstorphine, and taken home with them.
Mrs Anderson said her family placed advertisements in the Otago Daily Times and flyers were posted around Portobello.
But it was not until Max went wandering from his adoptive home on the other side of town they learned he was alive and well.
Animal Control picked the dog up and when the Corstorphine family tried to claim him from the SPCA, fate intervened.
A quick-thinking staff member overheard the family's conversation and when it was mentioned the dog had been found in Portobello, realised he was the one that had been advertised as missing.
The adoptive family claimed they had returned to Portobello a number of times with the hope of finding Max's owner.
However, Mrs Anderson found the story "very hard to believe" because of all the flyers she had put up.
Despite the story behind his adventure, the Anderson family was "overjoyed" to have him home, where he was being "spoilt rotten".
"It was just chance that he was picked up. We are very lucky the right person was in the right place," she said.
Senior animal control officer Jim Pryde reminded people to inform the Dunedin City Council or the SPCA if they found stray animals so attempts could be made to reunite them with their owners.
