After his mother tells him that he needs to give up having an imaginary friend, the 8-year-old Mac is forced to take his friend Bloo to stay at Foster's Home which provides shelter to unwanted Imaginary Friends.
As Madame Foster's birthday arrives, Frankie goes out to buy streamers and takes Mac, Bloo, Eduardo, Wilt, and Coco with her. They end up delaying Frankie when they wander off in the mall.
When Bloo finds a secret door at Foster's that no one is allowed to open, he ends up opening it and unleashing scribbles, who are very good at doing house chores, causing everyone to be lazy.
As Mr. Herriman grows tired of Bloo for not following the rules, things get even worse when Bloo accidentally breaks a statue of Madame Foster; Bloo sets out to fix the situation before Mr. Herriman finds out.
As Mac comes to visit Bloo, they end up stuck on the roof and unable to come down. As everyone is waiting for Bloo so that they can have dinner, Mr. Herriman asks them not to eat till he arrives.
As Mac and Bloo are making video interviews for the new Foster's website, they film Mr. Herrmian as he dances in a funny way. As the video ends up online, Bloo tries to keep Mr. Herrmian from seeing it.
As a new friend called Berry arrives at the house, she's immediately infatuated with Bloo and sets out to make him love her. But as Bloo doesn't reciprocate her feelings, she thinks that Mac is behind this.
As Terrence sets out to get back at Mac, he ends up creating a friend named Red to be mean to him and Bloo. But his plan ends in failure when Red turns out to be friendly and kind. In an attempt to outdo Wilt who becomes popular for rescuing imaginary friends, Bloo tries to follow his lead.
When Eduardo finds a stray puppy, he decides to keep it. But he has to deal with the consequences as Mr. Herriman doesn't allow dogs into the house, and the puppy ends up causing a mess that Eduardo takes the fall for.
Mac and Bloo set out to keep their friends from leaving the house so that they won't be adopted on Adopt-A-Thought Saturday.
After Mac and Bloo play in the rain, they end up getting sick, which makes them unable to watch a scary movie with the rest of the friends. But as Wilt, Eduardo, and Coco watch the movie, they start thinking that Bloo is a ghost, while Frankie is scared that someone is stalking her.