When an accident destroys Bubble Puppy's doghouse, the entire neighborhood volunteers to help build a newer, even better one and the guppies learn about the neighbourhood.
Molly is ready to introduce the show, when she comes across Gil and his very own cardboard neighborhood! Gil shows Molly all of the stores, each with their own products to buy. There are cookies at the bakery, tools at the hardware store and, of course, pizza at the pizza place, where Gil is tossing some dough. However, Gil gets a little overconfident and throws the dough too high. It isn’t long before his head is covered in pizza dough! Molly and Bubble Puppy laugh as Gil announces: “It’s time for Bubble Guppies!”
Molly and Gil take a stroll through their neighborhood, greeting all of their neighbors and friends, including Miss Jenny the hairdresser and Officer Miranda. Suddenly, a yell for help is heard from the supermarket: “Stop that cart!” A shopping cart has gotten away from Stan the snail, and is rolling out of control down the road! Gil rushes after the cart and manages to stop it before it does any damage. Officer Miranda tells Molly and Gil about their neighborhood, and all the places in it, and Stan returns the shopping cart to the supermarket. Molly and Gil say goodbye and head to school.
Just as Molly and Gil are about to tell the rest of the guppies about their neighborhood, they hear a strange rattling noise. Nonny thinks it sounds like a shopping cart. His guess turns out to be spot-on when they hear a familiar cry: “Stop that cart!” The guppies hurry to the window and see that another cart has escaped from Stan and is rolling out of control, straight towards Bubble Puppy’s doghouse! All the Bubble Guppies can do is watch as the cart slams into the doghouse, destroying it. Bubble Puppy is distraught. The doghouse is beyond repair but, undeterred, Mr. Grouper assures the Bubble Guppies that they can build him a brand new one, using materials they can find in their neighborhood. Mr. Grouper gets everyone thinking about neighborhoods, soon inspiring the Bubble Guppies to sing In My Neighborhood!
After the song, Goby pretends to be a new visitor to the neighborhood, and needs directions. Deema welcomes him to his friendly neighborhood information station (along with her horse companion ‘neigh-neigh’). Goby wants to find somewhere in the neighborhood where he can buy a muffin, and Deema suggests that he first visits a place where he can get some money. With the viewer’s help, Goby finds the correct place: a bank. With money in hand, Goby now needs to identify which store he can visit to buy a muffin. With the viewer’s help, we find the bakery, where Goby finally buys his muffin. Mr. Grouper then announces that it’s lunchtime.
Molly catches up with Gil, who is on his way to mail a letter. However, the mailbox he chooses is actually a fire hydrant, drenching him with water when he opens it! Goby then tells Molly that everyone is playing neighborhood. In the classroom, Deema introduces Mr. Grouper to the Bubble Guppies’ very own neighborhood. He visits Gil’s supermarket, where he gets a free pineapple, and Goby’s bank, where he’s given free money! Soon Mr. Grouper is swarmed by his friendly neighbors and collapses under the weight of all of their gifts! Bubble Puppy is still wistful over his broken doghouse, but Gil and Molly assure him that the whole neighborhood is going to help build him a new one. It’s then time to go outside.
Oona is Little Red Riding Hood, looking for a new house, and Deema is Goldilocks, head of ‘Goldilocks Realty’, helping customers find a house that’s just right. Oona wants a house with a swing, and Deema is only too happy to help. The first house they visit is built out of a shoe, which isn’t to Oona’s taste, and doesn’t have a swing. Just then, the big bad wolf appears, and the guppies run away! The next house they visit is made of straw, with the three little pigs as neighbors. However, the house is too small for Oona, and there’s still no swing to be seen. The big bad wolf returns, and Oona and Deema run for it once again. Looking for a place to hide, Deema suggests they go to the house that’s next to where Humpty Dumpty lives. With the help of the viewer, they find the right house, but the big bad wolf is already waiting for them! However, as it turns out, the big bad wolf is actually a very friendly neighbor and welcomes Oona to the neighborhood. Oona realises that the house they’re at has a swing, making it just right! Molly then invites everyone to do The Wave To Your Neighbor Dance!
After the dance, Gil is still on the hunt for the neighborhood mailbox, soon finding another container to put his letter. However, the mailbox he’s chosen this time is actually a garbage can, surprising Gil when he opens the lid, as the horrible smell literally follows him out of the room! Deema then reveals that it’s time to give Bubble Puppy his special surprise!
We’re welcomed to ‘Extreme Doghouse: Neighborhood Edition’, presented by Jimmie (voiced by Jimmie Johnson). Jimmie interviews Gil about his relationship with Bubble Puppy and how his doghouse was broken. Everyone in the neighborhood joined the Bubble Guppies to build him a spectacular new doghouse with lots of fancy gadgets and toys, including a bubble blower and a police siren! Gil calls Bubble Puppy outside, and his new doghouse is revealed! Bubble Puppy is overjoyed with his special surprise and happily plays as everyone cheers.
Just before the show closes, Gil finally finds the mailbox, but before he can post his letter, another shopping cart flies by with Bubble Puppy riding on it, knocking Gil off the ground! As the letter floats back down, Molly opens the mailbox and lets it glide gently down inside, finally posted. Molly and Gil laugh as the show ends.