The Muppet Babies are about to go to the art museum when Skeeter gets hurt by one of Piggy's pink skates. Before everyone could notice the skate, Piggy replaces her skate with Gonzo's in the scene of the accident so he could take the blame. Since they can't go to the art museum now, the muppets decide to bring the art museum to the nursery by creating their own works of art. Gonzo paints portraits of Piggy, but her roller skate mysteriously appears in Gonzo's paintings. Freaked out by this, Piggy attempts to keep Gonzo's paintings out of sight. The muppets then show their artwork to Nanny and an injured Skeeter. When Gonzo shows to everyone a beautiful picture of Piggy, Piggy finally confesses to framing Gonzo and apologizes.
The twins decide to get some snacks from the kitchen but Piggy warns them of the consinquences for getting snacks without Nannny's permision they ignore her warning but when piggy tries to sneak the snacks back in the kitchen Nanny accuses her of stealing from the fridge and makes her clean up the mess.
After Fozzie's skate key falls down the air vent the kids go looking for it. The kids use the closet as an elevator. At each level they go down they find stranger and stranger things. The reason it's so important that Fozzie find his skate key is because he's still wearing his skates! He can't get them off! Throughout the episode Fozzie goes wheeling and sliding all over the place!
Gonzo attempts to break the sound berrier while riding on a vaccum cleaner. He brings his trusty sidekick, Camilla along for a ride. However, misfortune strikes, and Camilla gets hurt, and Gonzo is unsure she'll make it. Nanny has to perform ""emergency surgery"" on Camilla, but in the end, she's alright. Gonzo sings the song ""Camilla"" to the babies, to show how upset he is about the thought of losing Camilla.
The babies read their favorite Mother Goose book, and are transported to Goosetown, when they realize that the town just isn't the same. So, taking the matters into their own hands, they visit Mother Goose, who believes that children don't like her tales anymore, and the residents of Goosetown have all stopped taking care of themselves. When the babies go around town patching things up, Mother Goose realizes that kids will always love her books, and everybody lives happily ever after.
Three kid Muppets come up with their own show. Segments include Gonzo's magnetic car, Animal's gymnastics practice, Pigs in Space running into carnivorous aliens, Fozzie's chicken joke, and P.I. Kermit's case of the stolen piggy bank.
Tug's space show becomes a space western. Segments include Fozzie's chicken joke, the evil Frogon aliens turning Pigs in Space into toads, Gonzo's airplane catching, Dr. Bunsen's gravity neutralizer, and P.I. Kermit's King Kong case.
Boo finds a talking spell book. Fozzie learns why the chicken crossed the road, Darth Vader-like villain tries forcing Piggy to be his wife in Pigs in Space, Animal mistakes baseball terms for cooking terms, P.I. Kermit tracks the Giggler.
Tug Monster announces a new sponsor for The Little Muppet Monsters Show - Gunko, a strange unusual product that's been sitting around in the basement for years and none of the monsters know what it's used for.
Scooter entrusts the monsters to watch after Foo-Foo while Miss Piggy goes out. Tug is less than thrilled, especially when she gets in the way of his acts for their show.
The Little Muppet Monsters are holding a talent show, featuring special reports from a globe-trotting Gonzo as he finds new and interesting acts.