Holling knows on the first day of seventh grade that his teacher, Mrs. Baker, hates him. She gives him a dark look when she realizes that he's the only Presbyterian student and will therefore be in school on Wednesday afternoons instead of at catechism or Hebrew school. Holling walks home to the Perfect House that afternoon and decides to recruit his parents as allies. His parents insist that nobody hates someone without reason, though Holling's dad also tells Holling that the Baker family is considering his architecture firm to remodel the Baker Sports Emporium, so Holling shouldn't do anything to make Mrs. Baker hate him. The next day, Holling is terrified that Mrs. Baker is trying to sabotage him. At recess, Doug Swieteck's brother forces Holling into a game of soccer. Holling trips Doug's brother, and Holling notes that Mrs. Baker looks disappointed that her assassination attempt failed.
On Wednesday afternoons, Mrs. Baker has Holling perform classroom chores. He hates it, but he remembers his dad's warning. One Wednesday, as Holling runs outside for recess, Mrs. Baker asks him to fetch trays of pastries from the cook, Mrs. Bigio, for the Wives of Vietnam Soldiers gathering later. Holling arranges them under the open window. That afternoon, Mrs. Baker hands Holling a box of erasers and asks him to clean them in exchange for a cream puff. As he pounds the erasers against the wall outside, he suddenly realizes that the chalk dust will ruin the cream puffs, but is too late to save them. The ensuing gathering is a disaster, as Mrs. Bigio ends up in the hospital from the chalk dust. At dinner that night, Holling's dad accuses Holling of sabotaging the cream puffs and yells at Holling's sister, Heather, that being a flower child is stupid. The next day, Mrs. Baker promises another cream puff. This incenses Holling's classmates, particularly Mai Thi, Meryl Lee, and Danny, who threaten death if Holling doesn't bring in cream puffs.
The following Wednesday, Mrs. Baker tells Holling that they'll read Shakespeare after he cleans out the cage of her pet rats, Sycorax and Caliban. Holling does as he's told, even though he (and everyone else) is terrified of the rats. He thinks that Shakespeare is a plot to bore him, and when Mrs. Baker says, unprompted, that Shakespeare isn't meant to bore students, Holling incredulously turns his attention away from the rats. Sycorax and Caliban escape, and even the custodian, Mr. Vendleri, isn't able to catch them. Despite Mrs. Baker's plot to bore him, Holling finds The Merchant of Venice thrilling.
In November, Holling's mother discovers a leak in the ceiling of the living room, and Mrs. Baker assigns The Tempest. Holling greatly enjoys the curses in the play and takes it upon himself to memorize them. He goes to school early one morning to practice and discovers that, despite his belief that Mrs. Baker wouldn't have assigned the play had she read it herself, she has indeed read it. Holling feels good as he walks home from school until he walks past the bakery and remembers that he owes his classmates cream puffs. He offers to work for the baker, Mr. Goldman, in exchange for cream puffs, but Mr. Goldman insists he needs a boy who knows Shakespeare, not one to work. Thus, Holling lands a part in a production of The Tempest, and Mr. Goldman gives him a box of cream puffs. When Holling takes them to school, Sycorax and Caliban spoil the plan by getting into the box during recess. Holling's week gets even worse: his dad refuses to give him an advance on his allowance, and he only has enough money to bring in five cream puffs later that week. Mrs. Baker, however, surprises Holling by buying cream puffs for the class. That afternoon, Mrs. Bigio comes into the room, crying. Holling discovers that her husband died in Vietnam.
As the holiday season approaches, all the teachers except for Mrs. Baker decorate their rooms. Holling isn't feeling the holiday spirit much, as he's going to play Ariel in the Holiday Extravaganza—and Ariel is a fairy with an embarrassing costume. Things start to look up when Mrs. Baker says that the Yankees player Mickey Mantle will be signing balls at the Baker Sporting Emporium, though Holling's excitement disappears when she offers the class extra credit if they also go see Holling in The Tempest. After the performance, Holling is shocked to see Danny, Mai Thi, and Meryl Lee crying in the front row. When it's time for Holling to leave to go to the Baker Sporting Emporium, the dressing room is locked, and Holling's dad doesn't show up. A kind bus driver drives Holling across town, still in costume, and even gives Holling a new ball. When Holling approaches Mantle, the player says he doesn't sign balls for boys in yellow tights. Holling is crushed, and Danny, who saw this exchange, abandons his signed ball. Over the next three days, Mrs. Bigio is cruel to Mai Thi, and Mrs. Baker keeps her students working hard. On the last day before break, Mrs. Baker gives Danny, Doug, and Holling new mitts and balls and sends them to the gym. There, they find the Yankees players Joe Pepitone and Horace Clarke. The players give the boys tickets to the Opening Day game. After this, Doug throws out the prank he was planning for Mrs. Baker.
A photo of Holling in The Tempest makes the front page of the local paper, and Holling is mortified to find that Doug Swieteck's brother pasted hundreds of the photos around school. That night, he suggests to his dad that he switch to a military academy. Later, Heather says military school is ridiculous because then Holling would be guaranteed to go to Vietnam. When Mrs. Baker insists that the embarrassment will blow over, Holling whines that she has nothing to worry about. He realizes his mistake: her husband, Lieutenant Baker, is fighting in Vietnam. Two days later, despite a power outage and inclement weather, Holling returns to school to take Achievement Tests. That afternoon, Holling heroically saves his sister from an out-of-control bus sliding on the icy roads. Mrs. Baker and Mr. Guareschi drive him to the emergency room, and Holling’s family refuses to show up.
On the day that Holling's family prepares for Holling's dad to accept the Chamber of Commerce Businessman of 1967 award, the ceiling of the Perfect Living Room falls in. At school, Holling is disgusted with Romeo and Juliet, though he recognizes that Mrs. Baker and his classmate Meryl Lee love it and uses this to his advantage: he asks Meryl Lee to go out with him on Valentine's Day. He learns at dinner one night that Meryl Lee's father, also an architect, is going out of business. When Holling tells Mrs. Baker that he can't afford to take Meryl Lee somewhere nice, Holling receives tickets to a production of Romeo and Juliet from Mrs. Bigio. After the play, Holling draws her a picture of his dad's plan for the junior high school renovation. The next week, Holling's dad takes him to the meeting between the school board, Hoodhood and Associates, and Kowalski and Associates. Holling realizes that Meryl Lee duped him: Mr. Kowalski's design copies Mr. Hoodhood's design. Holling shuns Meryl Lee for days, but soon realizes Meryl Lee didn't betray him on purpose. He buys her a rose, and when his dad later gloats that he got the job, he wonders if his dad ever got the chance to choose who he wanted to be. The following week, Mrs. Baker receives news that her husband is missing in action.
As spring arrives, Holling reads Julius Caesar and realizes that bad things are going to happen on the Ides of March: the school board is going to observe Mrs. Baker, and Coach Quatrini is holding cross-country tryouts. Holling spends his weekends running to escape the brewing conflict between his dad and sister. He's skeptical when Mrs. Baker decides to coach him, but he discovers that he runs faster with her help. Later, she shows him a medal from the Olympics that she won in 1956. Holling realizes he thought she'd always been a teacher. On the Ides of March, the observation goes reasonably well until Sycorax and Caliban fall out of the ceiling onto Mrs. Sidman's lap. She and Mai Thi are the only ones who don't flee the rats. Later, during cross-country tryouts, the rats escape and chase Holling, who sets a local record. The rats get hit by a bus, and students begin to tease Mai Thi for standing up to the rats. Mrs. Bigio cooks a Vietnamese dessert and apologizes to Mai Thi.
After her heroism, Mrs. Sidman becomes the principal. Holling makes the varsity cross-country team, and he fears his eighth grade teammates. One afternoon, as Holling and Meryl Lee do homework together, they learn that Martin Luther King, Jr. was assassinated. The next day is Opening Day at the Yankee Stadium. Even though Holling reminds his dad of his promise to drive him to the game, Holling's dad doesn't show up the next day. Mrs. Baker offers to take Holling, and Holling has an exceptional time at Opening Day. After spring break, Holling's dad informs Heather that she won't be going to college, as it's too dangerous. They don't attend Holling's first cross-country meet, where Holling, with Meryl Lee and Mrs. Baker’s support, wins his race and a $100 savings bond.
Throughout May, Holling's school practices atomic bomb drills. The tension between Holling's dad and sister intensifies until finally, she runs away to California. One Wednesday, Holling asks Mrs. Baker to call him by his first name so it doesn't sound like she's talking to his dad. She suggests that architecture isn't a bad profession, and she drives him around and tells him about the history of buildings. They go into the Catholic church, and Holling asks if hiding under desks will actually do anything if a bomb drops. Mrs. Baker says it won't, but it gives people comfort to be prepared. That night, Heather calls from Minneapolis, broke and alone. He tells her to go to a Western Union. The next day, Holling cashes his bond and wires it to his sister. Holling's parents refuse to pick her up at the station in New York, so Holling gets a ride into the city with Mr. Kowalski. The following week, Mrs. Baker learns that her husband is alive and will be coming home.
As June arrives, Holling watches his parents fall out of love. When Bobby Kennedy is assassinated, Holling and Heather go to the Catholic church to light candles and grieve with others. The next week, Mrs. Baker takes her class camping. Holling is tasked with carrying a pack of utensils and chili up the hill to the campsite, and Mrs. Sidman discovers later that he dropped all the utensils. Despite the cold, the students have a grand time until late that night, when it starts to pour. The next day dawns bright and warm, so they spend most of the day swimming. Holling believes Mrs. Baker wants to swim too. Mrs. Bigio arrives that evening with utensils, and she makes a Vietnamese dish for dinner. Later, she invites Mai Thi to come live with her. A week later, Holling and his family attend Danny's bar mitzvah. Holling feels as though he's watching Danny become a man, and he argues with his father over what becoming a man truly means. Finally, several weeks later, all of Mrs. Baker's class is there on the tarmac when Lieutenant Baker arrives home.