Stan, Kyle, Cartman and Kenny are riding their Big Wheels when they noticed that someone new has moved into South Park. When they stop to inspect the house a little boy named Blanket comes outside to say hello, and tells them they moved to South Park to escape city life. He invites them inside but they decline, but rethink the offer when Blanket tells them they have Arcade Games inside. They then realize the House is filled with toys and games, and the backyard is a circus. Michael Jackson (calling himself Michael Jefferson and wearing a fake mustache) then shows up and greets the boys to his home. He invites them to play with him and climb 'his wishing tree' and bursts out into song. Blanket can't climb up though, and Kyle tries to tell Mr. Jefferson who in turn ignores him. Later that day the four boys go to Stark's Pond where they tell all the kids of Mr. Jefferson and his cool house, and that he has invited everyone over to play.
Kyle begins to notice Mr. Jefferson is neglecting his own son and paying more attention to the other children. Blanket scrapes his knee, and Kyle has to clean it up on his own. While Kyle is tending to his wound, Blanket then reveals he is a test tube baby and that he never knew his mother. He starts to feel bad for Mr. Jefferson's son and brings it up with his friends, after which Cartman warns Kyle: "Mr. Jefferson is the best thing that's happened to this town in a long time, and if you mess this up, so help me GOD, I will rip your balls off with my bare hands! With my bare hands, Goddamn you!". Cartman angrily runs away and the other guys don't say anything.
Stan tells his parents about the Jefferson's and Sharon Marsh decides to invite them over to the Dinner party they are having with Gerald and Sheila Broflovski and Stephen and Linda Stotch. The adults try to talk with Mr. Jefferson later that night at the dinner but he is more shy around adults then children, and manages to creep out the other parents when he praises the kids. Cartman is jealous that they are having Mr. Jefferson over without him and shows up to see what they were doing. Right when he is ranting, Stan just closes the door.
At the Park County Police Station Harrison Yates gets a new report of the Jefferson's that says they are wealthy and black, so the whole department sets off to frame him for a crime. At Stan's house, he is woken by a knock on the window which turns out to be Mr. Jefferson dressed up as Peter Pan who wants to play. Cartman then comes through the window after Mr. Jefferson not wanting Stan to have Mr. Jefferson all to himself. Kyle then shows up at the door with Blanket who he found alone in his backyard. Mr. Jefferson won't take him home, though, because they pretend that their house is haunted. All of them sleep over at Stan's house in the same bed, including Mr. Jefferson. During their sleepover, Stan has a disturbing dream of Cartman and Mr. Jefferson making out. That next morning Stan's parents walk in to see Mr. Jefferson in Stan's bed and reprimand Mr. Jefferson for this instance of inappropriate behavior and tell him to leave, and he does with Blanket after paying Randy and Sharon Marsh one hundred dollars each to be quiet. It works on Randy but Sharon forbids the boys to see Mr. Jefferson anymore, none who have a problem with it except Cartman who tells Sharon, "Not go to Mr. Jefferson's anymore? Well, excuse my French, Mrs. Marsh, but you can suck my fat hairy balls."
The Police had spent all last night planting drugs and blood in Mr. Jefferson's home and staked out, waiting for him to come home. When Mr. Jefferson returns with Blanket though from Stan's house they see he really isn't black and they abort the operation, sick with themselves that they had almost put an innocent white man in jail. Mr. Jefferson refuses to let Blanket outside anymore because he thinks everyone is against them, and Blanket watches sadly as Stan, Kyle and Kenny pass by. He says hello to them from his window and they invite him to go chop wood with them, but Mr. Jefferson interrupts them and begins to dangle Blanket outside the window playing. Stan, Kyle and Kenny scream at him to put him down and Mr. Jefferson does so before shutting the windows. When Blanket begins to cry, Mr. Jefferson calms him down by pretending to take his nose, only to have the game turn on him when Blanket really takes the nose off of his dad and panics.
Harrison Yates returns home planning on quitting the force, but his wife talks sense into him telling him 'framing wealthy black people is in his blood', and encouraging him to stay on the force. Harrison agrees and decides to check into the Mr. Jefferson case to see what went wrong. Mr. Jefferson, meanwhile is desperately trying to stop his face from falling apart from year of plastic surgery, and calls his Plastic Surgeon in California to see if he can fly out and put his face back together that it falling apart. Outside the house, Kyle, Stan and an unhooded Kenny come up with a plan to break in while he is on the phone in hopes that they can rescue Blanket. They replace Blanket with Kenny in his bed to cause a distraction. Harrison Yates at that time is calling the Santa Barbara Police Department, the place Mr. Jefferson moved from, and they tell him they framed a rich black man of Molestation who didn't look black at all, and he ran away before the trial.
Stan and Kyle try and smuggle Blanket out of the house but are confronted by a horribly disfigured Mr. Jefferson who wants them to play. They run away to Blanket's room and Mr. Jefferson, upon seeing Kenny dressed up like Blanket, tosses him in the air playfully. However, Kenny is thrown too high and is killed when his head smashes through the ceiling. Mr. Jefferson chases the other three outside where the Police Department is waiting to arrest him for the molestation charges put on him by the Santa Barbara Police force and a crowd gathers around. Cartman then jumps to the defense of Mr. Jefferson, saying he is tired of all the 'lies' being spread about Mr. Jefferson. He adds that Mr. Jefferson may be different but it was only because he had to work all the time when he was young and never had a childhood of his own, which was why he associated more with children. Kyle then explains to everyone that it might seem logical that the police really do spend all their time framing rich black people (the police look at each other nervously at this point) and that it might be OK that Mr Jefferson acts like a child because never had a childhood, but delivers the message that he has to grow up because he has a child of his own now. Mr. Jefferson then sees what he should do and decides to be more of a father to Blanket and give away their wealth to the needy, no longer leaving a reason for the Police to arrest him since he is no longer rich.