The novel begins with Greg Heffley getting ready for his first day in middle school, when he is teased by his older brother, Rodrick, because his mother bought him his school supplies. Greg also has a spoiled little brother called Manny, who gets everything he wants and never gets in trouble. His father Frank does not enjoy Greg’s lifestyle of playing video games all day instead of going outside and playing sports.
During his first day of school, Greg is forced to sit with the school nerd called Fregley, whom he tries to keep distance from. He isn't sure whether his friend Rowley Jefferson will be able to fit in in middle school, because he considers him to be immature. As a way to boost their popularity, Greg and Rowley decided to join the wrestling team, but Greg quits the team after he loses a match against Fregley.
On Halloween, Greg and Rowley go out for trick-or-treating, but they are bullied by teens who spray them both with a water-filled fire extinguisher. Greg threatens them by telling them that he is going to call the cops, but the teens begin chasing them. Greg and Rowley both hide at Greg’s grandmother’s house until the teenagers leave.
During Christmas break, Greg and Rowley decide to play a game in which Rowley has to ride a bike while Greg tries to knock him off. While playing, one of the balls that Greg throws gets under the front wheel, causing Rowley to fall off and break his arm. When he returns to school with a cast, the girls started nursing him (carrying his books, etc) which makes Greg jealous. After Rowley heals up, he and Greg join the safety patrol in which they walk the younger kids to their homes.
One day, while walking the kids home, Greg decides to scare the kids by chasing them with a stick with worms. A neighbor contacts the school and tells the principal about his behavior. As punishment, the school principal fires Rowley from the safety patrol, because Greg was wearing Rowley's safety patrol jacket when he chased the kids, the neighbor saw Rowley’s nametag on the jacket. Greg wants to come out and tell the truth, but he doesn’t. It after a while, Greg confesses; Rowley is hurt and stops being friends with him.
Greg tried to becomes friends with Fregley to make Rowley jealous, although he makes him uncomfortable. He then auditions for the school production of The Wizard of Oz, where he lands the role of a tree.
During the opening performance, Rodrick brings a video camera to film the play. Greg, due to his nervousness about singing, confuses the other actors, who also fail to sing. Patty Farrel, who plays the role of Dorothy, gets frustrated and insults Greg. So, Greg throws a prop at Patty and then everyone gets into a fight.
The teenagers from Halloween come back, and this time, they force Greg and Rowley to eat a piece of cheese that was on the ground. The cheese had become moldy since it had been left on the ground years ago. Greg says that he can’t because he is allergic to lactose and he can die if he eats it. The teenagers leave when Rowley eats the cheese. The other students notice that the cheese is missing, thinking that someone destroyed it. But Greg tells them that he decided to throw it away because he was sick of seeing it there. Because of this, nobody suspects Rowley of having the dreaded “cheese touch.”
Greg and Rowley resolved their issues and make plans to spend the entire summer vacation playing games.
