When a neighborhood boy tries to tell Lydia about the facts of life, she responds by punching him in the mouth. While Ellen is mostly concerned that Lydia has given the boy a loose tooth, John attempts to discuss the concepts of inferiority and superiority with his daughter

Lydia is concerned about nightmares, so John tells stories about his family during his childhood in Columbus, Ohio. He recalls several eccentric relatives, including his Aunt Hester, who was so afraid of burglers that she put her household good outside her bedroom door every night so no one would break in to steal them.

Lydia is supposed to go to a dance with a boy named Elbert, but when a bully beats him up and insists that Lydia go to the dance with him, John takes the side of the underdog and tries to talk Elbert into retaliating.

During a sixteenth anniversary party for the Jensens at the Monroe's house, Phil loses his temper when his wife Ruth interrupts one of his stories, and when he accidentally spills a martini on her, war is declared. After a skirmish in the grocery store, battle lines are drawn and Ruth throws Phil out of their house, which causes the men, including Hamilton Greeley and a fellow writer named J.J. Howard, to gather at a bar and decide how to prevail.

Frustrated while trying to buy a Christmas present for Lydia, John makes the unfortunate choice of an American flag as her gift. Lydia is not pleased, and when the people in the neighborhood learn of John's inappropriate gift, a group of them show up at the Monroe's accusing him of having his holidays confused.

When Greeley decides to dedicate an entire issue of The Manhattanite to children's book author George Lindsay Lockhart, John, who despises people who write for children, is outraged--even more when he discovers that Greeley will be staying in his house as they collaborate. John's ire is raised even more when Ellen and Lydia take a liking to Lockhart. But when the two men start working together, John discovers Lockhart isn't quite the saccharine, optimistic soul he had expected.

John finally manages to get his revenge on Zeph Leggin by studying old jokes and using them to defeat the local humorist in a battle of wit. So Zeph decides it's time to move away from the Connecticut village, and a guilty John feels compelled to convince him to remain.

The Monroes have a new maid who for some reason has a phobia about modern appliances, and Ellen tells John to be kind to her and keep up appearances while she's away. But the maid finds John, who is working in the attic, as distracting as the appliances.

The Monroe's new neighbor, Paul Morton, who is also a cartoonist, challenges John's more sophisticated humor by pitting him against the town's answer to Will Rogers, Zeph Leggin. To John's distress, Ellen and Lydia are taken with Zeph's more rustic humor, and even in his fantasy world John has trouble winning out.

After being bitten by the family cat, Dimity Ann, John takes her away and leaves her in a new housing developement. Lydia believes the cat ran away because of a dislike for her, while Ellen's suspicions come nearer the truth. John fantasizes about being on trial before a real judge for his ""crime.""

Greeley rejects yet another of John's cartoons which he doesn't understand, one involving a seal in the bedroom of a married couple. Ellen and Lydia agree with Greeley, and when John tells Phil about his problem, Phil suggests the seal might represent John's mother who is visiting the Monroes. Naturally this provokes a fantasy in which John's mother, who showed up at the house wearing a sealskin coat, actually becomes a seal.

John, finding himself bothered by the ordinariness of his life, fantasizes about being involved in a tale of espionage involving pickle forks and a malevolent dragon.

After Greeley once again fails to understand the humor in one of John's cartoons, John quits his job with The Manhattanite and returns home, where he begins to wonder what he'll do for money now. He settles on playing the stock market and fantasizes about a meeting with J.P. Morgan.

When Lydia comes down with a bad cold, John takes the opportunity to try to show her that people with vivid imaginations are better off than those who approach life from a more ""realistic"" point of view. The story of ""The Unicorn in the Garden"" doesn't seem to work, so John relates the story of his great-grandfather, who not only was a prolific storyteller but managed to get the fire department called out when he was trying to attend to young John's sniffles.

John has dog problems with just about everyone: Greeley, over a magazine piece about his childhood family pet who bit people; Ellen, who makes him sleep on the couch after an argument about animals' eyes; and Lydia, who wants a new puppy. Then Christabel, the family's ancient poodle, becomes ill, and everyone seems to hold John at fault.

In order to get closer to her father, with whom she seems to share little in common, Lydia learns how to play chess from her mother and begins seriously beating John at the game. He enlists the help of Oscar, a chess expert who works at The Manhattanite, to beat her, but to no avail. So John imagines the results of three increasingly bizarre plans to win out over his daughter.

When the noise from the freight elevator beside his office becomes intolerable, John decides to try working at home, only to be confronted by Lydia, who is unhappy with her seat at school. She decides to run away into Manhattan to stay with her bohemian Aunt Kate--accompanied by her worried father.

When Lydia complains to her father about the dullness of her history lesson at school, John tells her his own version of the story of Generals Grant and Lee at Appomattox, a version that plays fast and loose with the facts. After Lydia repeats John's fanciful take on the story in class, her beautiful teacher pays John a visit at home.