Lois signs Stewie up to star as the baby Jesus in a nativity scene during the Quahog Christmas pageant. Although Stewie initially resists, he eventually plays along in hopes of pleasing Santa, whom he believes is omnipotent and thereby can supply him with plutonium.
After Lois repeatedly reminds Peter to donate a present to charity, he mistakenly donates all of the family's Christmas gifts to a needy kids' charity. Lois seems unfazed by the mistake, but insists that the entire family shop for new presents at the mall. Peter reluctantly agrees, although he only wants to watch Kiss Saves Santa on television; Brian stays behind to keep an eye on the turkey cooking in the oven. While at the mall, Peter finds a pair of barrettes that Meg wanted and ends up chasing down an old lady to a pet fish store called "Age of Aquariums", where the old lady throws fish food on him and all the fish jump on him while the old lady escapes.
Meanwhile at the Griffin house, an ember shoots onto the family rug from the fireplace. While Brian tries to deal with this crisis, the overcooked turkey begins to burn. Brian finds a fire extinguisher, but to his dismay, it is merely a novelty item filled with plastic snakes, which, upon being released into the fire, promptly explode and make it worse. After using the real fire extinguisher, he slips on the foam from it and the TV falls on top of him. Afterwards the interior of the house is destroyed; Brian escapes, but with his paws burnt hairless. Amazingly, Lois maintains a cheerful attitude, saying that they just need to clean up a bit; but when Meg tells her that they are out of paper towels, Lois finally snaps, in a parody of the "wire hangers" scene from Mommie Dearest. She screams at the family about how difficult it is to ensure that Christmas happens without a hitch, then runs from the ruined house on a rampage (Meg then ironically finds some paper towels mere seconds after Lois' rampage).
Lois storms throughout the town, berating people for their ridiculous Christmas optimism. Lois also pushes George Bailey off a bridge in the scene from It's a Wonderful Life. Then, on the way to town square, she melts Frosty the Snowman. When Lois reaches the town square, she begins to climb the huge Christmas tree there, bent on destroying the ornamental star on top. The rest of the family arrives and Stewie, eager to perform a good deed to earn Santa's grace, performs an extemporaneous monologue about Jesus and the meaning of Christmas. Lois, watching Stewie, regains her sanity and begins to descend the tree; but Peter, who feels Lois still does not get it, orders the police to shoot her with a tranquilizer dart.
The next morning at Christmas, the family has gathered in the charred living room, happily opening their presents; Stewie gets his plutonium, Peter gets a new VCR and his own copy of Kiss Saves Santa, Brian gets at what first appears to be a wine bottle, but actually turns out to be a book of some type, and Lois, as Peter would put it, is as cheerful as ever, despite still being heavily sedated, sitting limply in a rocking chair and drooling. In the closing scene, the Griffins wishes everyone a Merry Christmas (though Lois is still too numb to speak clearly).