Jerome Horwitz Elementary School is going to hold its second annual Invention Convention. George and Harold are eager to enter, because the winners of the Invention Convention get to be Principals for the Day. Unfortunately, their principal, Mr. Krupp, wants to prevent a fiasco like last year's from happening, in which George and Harold used their invention, a homemade body-activated superglue, to glue everyone to their seats, and prevents George and Harold from going to the Invention Convention, forcing them to stay in study hall all day. In retaliation, they decide to secretly sabotage everyone's dreams and inventions.
While sneaking in and getting ready to sabotage the inventions that evening, George and Harold ran into Melvin Sneedly, the school brainiac and tattletale, who is working late on his invention, the PATSY 2000, (which in turn is an acronym of Photo-Atomic Trans-Somgobulating Yectofantriplutoniczanziptomiser), a photocopier that turns one- and two-dimensional objects into living, breathing, three-dimensional objects. To demonstrate, he puts in a photo of a mouse and out comes a real mouse. George and Harold assume Melvin put the real mouse in earlier, and he's just trying to fool them. They promise not to sabotage Melvin's invention as long as he doesn't report them for what they are doing and Melvin eventually agrees.
Because of George and Harold, the Invention Convention is a bigger disaster than the previous one and the convention has to be called off. Melvin Sneedly breaks his promise and tattles on George and Harold. An infuriated Mr. Krupp puts them on permanent detention for the rest of the school year, threatening the two boys that they will be suspended if they leave the detention room once for any reason. George and Harold get assigned writing lines on the chalkboards in the detention room every day for two hours after school. With each boy using a quick line-writing device (a series of joined poles with pieces of chalk in them) they are able to write all their lines in 3 ½ minutes. With their free time, the boys decide to write a comic called "Captain Underpants and the Attack of the Talking Toilets" in which Captain Underpants defeats zillions of vicious talking toilets and their leader, the Turbo Toilet 2000.
George and Harold sneak out to make copies of their new comic without Mr. Krupp catching them; however, the copy machine in the office is surrounded by teachers. They decide to copy off of Melvin's photocopy machine, still thinking it's a normal photocopier, but Melvin's machine really does turn one- and two-dimensional objects into living three-dimensional objects, so the evil, vicious talking toilets come to life and attack everyone in the school. George and Harold are also caught outside detention by Mr. Krupp and are forced to be suspended. Before George and Harold can leave, Mr. Meaner, the gym teacher opens the door to the gym to throw a party and is promptly eaten by one of the toilets. Ms. Ribble then snaps her fingers at a toilet, making Mr. Krupp turn into Captain Underpants, who comes up with a plan to stop the Talking Toilets. George and Harold chase after him as he takes several pairs of underwear from unsuspecting clotheslines.
Once back at the school, the trio find out that the Talking Toilets have eaten every teacher in the school except Mrs. Ribble. Once Captain Underpants knocks Mrs. Ribble into a toilet, the trio try to use the underwear as a slingshot to shoot food in the Talking Toilets' mouths. Since it is disgusting chipped beef (tomorrow's lunch) the Talking Toilets vomit all the teachers out and die. Soon after, the Turbo Toilet 2000 bursts out of the school (he was turned to life like all the other Talking Toilets, but, as stated by George, was previously unseen). Despite Captain Underpants's efforts, the Turbo Toilet 2000 defeats him easily and swallows him whole. George and Harold sneak into the school and use Melvin Sneedly's machine to make a super-powered robot called the Incredible Robo-Plunger, who does whatever they say (it is unknown how this is accomplished when using the PATSY 2000).
The Incredible Robo-Plunger defeats the Turbo Toilet 2000 and gives the final blow by plunging into the Turbo Toilet 2000's mouth, killing him, giving the boys a chance to save Captain Underpants (who is now turned back to Mr. Krupp, thanks to the water inside the Turbo Toilet 2000). Noticing the damage in the school caused by the toilets, Mr. Krupp fears that he will be responsible for the damages and get fired from his job. Fortunately, at the boys' command, the Robo-Plunger repairs all the school damage, and flies off to Uranus with the command, never to return. In return for the boys fixing the school, Mr. Krupp cancels their detention and suspension and officially places them as "Principals for the Day". As the principals, they hold an all-day carnival for the students and put the teachers (and Melvin Sneedly for his tattling) in detention. At the end of the day, George and Harold visit the detention room. After Mr. Krupp questions how the carnival will be paid for, they reveal they sold Mr. Krupp's antique furniture, as well as all the furniture in the teacher's lounge. Mr. Krupp is furious, and the boys run out of the room. Miss Anthrope snaps her fingers after them, causing Mr. Krupp to become Captain Underpants again, much to the boys' dismay.
The comic in the book starts with another normal day at school (the cafeteria is serving toasted rat sandwiches for lunch, the principal is mean, and the gym teacher is acting all mean and crazy) until a UFO appears and shoots the school with a ray. This ray causes the toilets to come to life and start eating everyone in the school (including, to nobody's dismay, the gym teacher). Captain Underpants appears and places plungers in the toilets' mouths so they cannot eat anymore. The Turbo Toilet 2000 (T.T.2000) appears and a fight begins. Captain Underpants wins by giving the T.T.2000 a wedgie and placing it on a stop sign. The T.T.2000 is aimed and fired at the UFO, causing both to explode. Everything goes back to normal as the comic ends (to everyone's dismay, even the gym teacher returns).
George and Harold want everyone to know what happened in The Adventures of Captain Underpants. They make this comic book for everyone to know. The story involves 3 parts.
George and Harold get introduced as two cool kids. It says that everyone loved their homemade Captain Underpants comics expect for their principal, Mr. Krupp, to like them.
It goes to when Mr. Krupp blackmails George and Harold so they bought the 3D Hypno-Ring and hypnotized Mr. Krupp into Captain Underpants. He jumps out of the window and heads to an old warehouse but before he can get in it explodes and he runs away along with George and Harold who had been running after him the whole time.
It shows them heading back to school when George pours water on Captain Underpants's head which turns him back to Mr. Krupp. George and Harold warn everyone not to snap their fingers around Mr. Krupp for then he will turn back into Captain Underpants.
Characters who appear in this book are:George Beard: One of the students at Jerome Horwitz Elementary School. He is friends with Harold Hutchins.
Harold Hutchins: In the same school as his friend, George Beard.
Mr. Krupp: Jerome Horwitz Elementary School's villainous principal whose goal is to kill George and Harold, and take over the world.
Captain Underpants: A superhero from George and Harold's comics, George and Harold accidentally hypnotize Mr. Krupp into thinking he's Captain Underpants.
Melvin Sneedly: The school genius and tattletale.
The Incredible Robo-Plunger: A robot who beats up the Turbo Toilet 2000. He is made by the PATSY 2000.
Madison Mancini: A student who invented the Automatic Dog-Washer that was ruined by George and Harold.
Donny Shoemyer: He invented the Electric Ping-Pong Ball Server which was also ruined by the pranking duo.
Freddie Moore: A student who invented the Volcano Detector.
Ms. Ribble: The teacher of Jerome Horwitz Elementary School and one of Mr Krupp's goons.
Miss Anthrope: The school secretary and one of Mr Krupp's goons.
Mr. Meaner: The gym teacher at Jerome Horwitz Elementary School and one of Mr Krupp's goons.
The Talking Toilets and the Turbo Toilet 2000: The villains of the book. The Turbo Toilet 2000 returns on his own in the eleventh book, Captain Underpants and the Tyrannical Retaliation of the Turbo Toilet 2000.