At demonstration speech day for their fourth grade class, George Beard and Harold Hutchins show off a new prank of theirs, the "Squishy". The idea is to place two ketchup packets under a toilet seat so the next person who sits on the toilets gets ketchup sprayed all over the back of their legs (or the front, if they push down the toilet seat while standing in front of it). Everyone wants to try it out, but before they can do so, Melvin Sneedly, the class tattletale and nerd, forces everyone to watch his demonstration before they leave, which is a machine that combines objects called the Combine-o-Tron 2000. Using his hamster, Sulu, and a robotic hamster body that he built, Melvin combines the two, making Sulu a bionic hamster. Melvin tries to order Sulu to do some tricks for the class, but Sulu refuses to obey Melvin, acting like a normal hamster. Melvin threatens to physically punish Sulu with a ping pong paddle. The hamster uses his new bionic abilities and defensively uses the ping-pong paddle to spank Melvin himself. Melvin yells that he doesn't want Sulu anymore and runs off screaming as a result. Everyone, excited to try out the new prank, including Ms. Ribble, runs behind shouting "Squishies!" After noticing the scene, George and Harold adopt Sulu, who happily joins the two.
Meanwhile, Ms. Ribble uses a Squishy on an already grumpy Mr. Krupp, who believes that George and Harold are responsible. While going to confront the duo, Mr. Krupp notices that most of the students have already fallen victim to the prank. When Mr. Krupp finds them in the lunchroom, Melvin almost immediately tattles on George and Harold, informing Mr. Krupp that although George and Harold did not perform the prank, they taught the fourth graders the prank. Mr. Krupp sends George and Harold into detention, which makes the two boys furious. They decide to get revenge on Melvin by making a slanderous Captain Underpants comic book starring him.
Having read the comic, Melvin angrily goes home and builds a super-powered robot. His idea is to combine himself with the robot using the Combine-o-Tron so that he will have super powers like Sulu, in this way he can get revenge on George and Harold. Unfortunately, however, Melvin sneezes at the last second from an allergy to his family's pet cat, so he gets combined with the robot and boogers, turning him into the Bionic Booger Boy. Bionic Booger Boy is a larger version of Melvin made of bionic parts and nasal mucus.
Melvin soon sees the good side of being the Bionic Booger Boy. He becomes the star football player and an ace volleyball server. He even acquires his own drinking fountain. Cold and flu season begins, however, and Melvin begins to act differently, producing sneezes that cover large areas in snot, and speaking like a monster. When the teacher Ms. Ribble is out sick with a cold, and the class visits a tissue factory, Melvin becomes gigantic and evil as a natural defense against the tissues. He violently destroys the factory.
George turns Mr. Krupp into Captain Underpants to save the day. He saves his secretary, Edith Anthrope, from the Bionic Booger Boy, and she gives him wet kisses as thanks. The sloppy, wet kisses turn him back into Mr. Krupp, and he is devoured by Melvin. Melvin then goes for George and Harold. But Sulu arrives to save the day and defeats Melvin using large size novelty items from warehouses.
Gaylord and Helen Sneedly, Melvin's parents, come in and pledge to try to help turn their son back to normal. George's suggestion, reversing the batteries in the Combine-o-Tron 2000, surprisingly works, and Melvin and Mr. Krupp are brought back, with three robotic booger globs flying off. This unintended result however, is that Mr. Krupp and Melvin's brains have accidentally switched bodies. Although Mr. Krupp starts claiming credit for building the Combine-o-Tron 2000, Melvin tries to put George and Harold into jail. The booger globs come to life, and smash the Combine-o-Tron.
The three robo-boogers chase the four heroes until they come to a dead end. They are about to destroy the protagonists when Sulu swallows them and spits them into outer space. As everyone prepares to go home, it becomes obvious that there was a mistake with the Combine-o-Tron, and now Melvin and Mr. Krupp have switched bodies. After a number of incidents, George and Harold discover the mix up. Melvin is renamed "Mr. Melvin" and Mr. Krupp becomes "Kruppy the Kid". Understanding the present situation, Kruppy the Kid orders Mr. Melvin to build another Combine-o-tron. Mr. Melvin obliges, however the process would take six months. George suggests making a time machine to go back in time and get the first Combine-o-tron.
Struck with what was originally George's idea, Mr. Melvin snaps his fingers. As a result, Kruppy the Kid becomes Captain Underpants, his alter ego and superpowers somehow following Mr. Krupp into Melvin. George and Harold are forced to tell the secret of Captain Underpants to Mr. Melvin, who subsequently plans to use the Combine-o-Tron to get back into his own body, and keep Captain Underpants's powers. He assigns George and Harold to create a comic book about him, and sets to work building the time machine.
The next day, Mr. Melvin is furious to discover that George and Harold's comic book depicts him as uncool. Mr. Melvin then shows them the time machine, and explains to George and Harold that they must be careful with it, because if it is used two days in a row, some "unknown bad thing will happen". He also equips them with the "Forgetchamacallit 2000": a device that erases a person's short term memory, and a fake Combine-O-Tron 2000. George and Harold go back in time two days and retrieve the Combine-O-Tron 2000 after it gets Melvin and Mr. Krupp back, but before it is smashed.
They go back to the time machine in the library, where the librarian Miss Singerbrains steals the Combine-O-Tron 2000 and the Forgetchamacallit 2000, going to the police station. However, the boys go back in time to the Cretaceous period of the Mesozoic era and get a Quetzalcoatlus. The two return to the moment when Miss Singerbrains is driving her car to the police station with the Combine-O-Tron 2000 and Forgetchamacallit 2000 in hand. George convinces Miss Singerbrains she is dreaming because of "the dinosaur's presence, kids running around in purple potties and laser zappers", etc. Harold sends Crackers back to his own time. They erase Miss Singerbrains's memory and travel to the present time.
Meanwhile, Kruppy the Kid, as Captain Underpants, has been getting into mishaps for the past two days. He ends up breaking the law by preventing the school football team from winning an important game, destroying the skateboards of three skaters, and trying to rescue a cat from a tree. At the moment he tried to rescue the cat from the tree, he was helping two old ladies cross the street. He successfully rescues the cat but accidentally leaves the old ladies in the tree, making the old ladies angrier than ever. Now the football team, the skaters, and the old ladies are very disappointed in Kruppy the Kid. Mr. Melvin finds Captain Underpants and uses the Combine-o-Tron 2000 to switch one another back into their original bodies.
Meanwhile, in space, the robo-boogers Carl, Trixie, and Frankenbooger land onto a spaceship that was examining Uranus, where the robot and the toilets from book #2 are. They hang onto the spaceship as the spaceship goes back to Earth. Once on Earth, they start destroying the space-center. Captain Underpants goes off to help, but he crashes into the parking lot, and discovers that his superpowers were taken by Melvin, who refuses to help unless George and Harold change the comic book about him.
Captain Underpants, despite the fact that he doesn't have super-powers, decides to go after the Robo-Boogers, claiming he still has the power of "underwear". George and Harold follow him. The three are cornered at a local store, Everything Except Fabric Softener. The three of them start throwing random items stacked outside the stores, tennis shoes, hemorrhoid ointment, and oranges. They initially lose to the Robo-Boogers, but figure out that the Robo-Boogers die when they come into contact with the oranges. This way, they beat Carl, but Trixie & Frankenbooger become cautious and dodge the oranges. Captain Underpants baits the Robo-Boogers by standing on top of John's House of Toilets and doing an annoying dance called "The Underpants Dance". The Robo-Boogers start to climb up the building, when they get hit by a well-placed Squishy, with boxes of oranges in place of the ketchup packs.
Soon George and Harold have to answer questions for the Eyewitness News crew, but Melvin appears and lies to the Eyewitness News crew, saying he beat the Robo-Boogers with his super-powers. George and Harold sneak back to the school while Melvin tries to force Captain Underpants to bow down to him. George and Harold return with the Combine-o-Tron 2000 and the Forgetchamacallit 2000. They change Melvin and Captain Underpants so Captain Underpants has his powers again, then they erase the memories of the news crew and the TV audience.
Melvin wails in grief of his lost powers and gets his comeuppance by being chased by the people Captain Underpants annoyed while in Melvin's body as retribution. When George and Harold return to their clubhouse, George learns that Harold did not take Crackers back to the dinosaur age, but is keeping him as a pet, like Sulu. George tells him they can keep him for the night, but they had to bring him back to his time the next day. The next day, George, Harold, Sulu, and Crackers go into the time machine to send Crackers back home, despite Melvin's warning to let it cool down the day after it is used. Once they hop inside the Time Machine, they end up in an opposition fictional universe setting up Captain Underpants and the Preposterous Plight of the Purple Potty People.
The comic begins with a kid named Melvin Sneedly, who is a complete tattletale. Everywhere he goes, he causes their misery by accusing kids of breaking every single solitary rule. One day Melvin tells on a crook that robbed a bank to the police, and that makes him a hero. In fact, he has become so famous that he decides to run for mayor. He wins the election by a landslide and becomes the youngest mayor ever. Melvin sets up a mess of unreasonable laws that cause people to get arrested too easily. The jails fill up so quickly, that Melvin is forced to capture the lawbreakers himself by creating a giant robot-jail called The Tattle-Tron 2000. Melvin goes off with his Tattle-Tron 2000 capturing any "lawbreakers" he can find. Captain Underpants appears and gets captured by Melvin, but easily escapes. Captain Underpants wants to fight the robot but doesn't want to hurt the people inside. Regardless, he has an idea. He gets a giant bottle of "Mrs. Plop's Prune Juice". Captain Underpants pours the prune juice into the mouth of the robot-jail, causing the it to shoot out the prisoners. Captain Underpants breaks open the glass dome with Melvin inside, and sends him to "Jail for dumb kids" and frees the other prisoners.
The comic starts with a truck leaving a nuclear power plant with a bucket of Nuclear Waste driving to the toxic waste dump. One barrel falls off and lands in a cotton field, where the cotton absorbs the Nuclear Waste and grows to an unbelievable size. One day, the cotton was harvested and taken to the underwear factory. The cotton is then made into "Glow In the Dark underwear", and Melvin's mother gives Melvin this so-called "Glow-in-the-Dark underwear" because they were having a big sale. Overnight, the radioactive underwear causes Melvin to grow into a monster, and on his way to school the next morning, the police spot the oversized nerd. The police call the military, and war is declared. Melvin picks up a tank, throws it, and it lands on the gym teacher. Then Captain Underpants flies in and tries to figure out how to defeat him, and he notices a tag on the back on the underwear saying the underwear will shrink if washed. Then Melvin grabs Captain Underpants and he pleads Melvin not to dunk him in the lake. Then Melvin takes Captain Underpants to the lake to dunk him, but his underwear becomes soaked and starts shrinking. Captain Underpants asks a passing bird to pop Melvin because he looks like a balloon. The bird pops him and Captain Underpants whisks Melvin away to a Jail House for Stupid Nerds. The comics ends with a moral saying that people should buy pre-shrunk underwear.George Beard - A student of Jerome Horwitz Elementary School.
Harold Hutchins - A student of Jerome Horwitz Elementary School.
Mr. Krupp - George and Harold's mean principal and substitute teacher.
Captain Underpants - The alter-ego of Mr. Krupp.
Melvin Sneedly - George and Harold's nemesis.
Sulu - Melvin's hamster (now George and Harold's bionic hamster).
Ms. Ribble - George and Harold's nice teacher (only appeared in part 1).
Miss Anthrope - The secretary of Jerome Horwitz Elementary School.
Mr. Meaner - The coach of the Purple Dragon Sing-Along Friends (only appeared in part 2).
Super Diaper Baby - The character in the comic book "Captain Underpants and the Terrifying Tale of the Tattle-Tron 2000".
Diaper Dog - Super Diaper Baby's friend in the comic book "Captain Underpants and the Terrifying Tale of the Tattle-Tron 2000".
Crackers - A purple pterodactyl.
Old ladies - The mean angry female elders (only appeared in part 2).
Skateboarders - The mean teenage boys. (only appeared in part 2).
Miss Singerbrains - The school librarian.