Everyday the TOWNSPUPPETS go into the cities to put on shows for the children. Everyday, the same four puppets are left behind: MR. MADCAP, who is always angry; Ms. HAPPY FORTUNE, who can only laugh and giggle; SENOR SAD SACK, whose response to all things is to cry and sigh; and the QUEEN, who can be nothing but pompous and vain. Since all Lee'nardo's efforts to make them like his other puppets have failed, he has cast them out to live apart from the others in an old warehouse.

THE FOUR, longing to be in the shows, and sick and tired of being left out, decide to take action against Lee'nardo. They steal the sun and moon, plunging Rainbow Junction into frozen darkness. They tell Lee'nardo they won't give back the sun and moon until he finishes making them, and gives them the rest of their feelings. But when Lee'nardo tells them that stealing is a crime and threatens to put them in jail, The Four give back the sun and moon.

Unwilling to give up, The Four stage a protest and sing "Power To The Puppets" while marching through the city with signs above their heads, causing great excitement and confusion. Offended and infuriated, Lee'nardo decides to permanently rid Rainbow Junction of the troublesome four: he will throw them in the dumpster and turn them into wood chips.

That night, The Four sneak out, slam the door behind them and rush away. But when a fire starts inside the old warehouse, they realize Sad Sack, who's always lagging behind, is still inside. Lee'nardo, smelling the smoke, is terrified. Fire will destroy his whole world. Without concern for the poor Senor Sad Sack, he starts evacuating his Townspuppets as The Three desperately try to break down the door. Finally, staking their lives, Ms. Happy Fortune, the Queen and Mr. Madcap save their friend Senor Sad Sack and Rainbow Junction.

Lee'nardo can't forgive himself for having cast aside The Four. So ashamed of himself, he won't even accept consolation from his Townspuppets but only when Mr. Madcap sings to him: "Ah Fiddlesticks! Even when there's high stakes, people make mistakes!" Moved by the deep feelings and courageous acts of The Four, Lee'nardo and the Townspuppets celebrate them. And so, The Four finally have their dreams realized: to be appreciated, despite the fact that they're different, and to be in the shows.