Mac is told by his mother that he is getting too old to have an imaginary friend, so soon Bloo will have to leave. Worried that he won't have any place to go, Bloo and Mac investigate the Foster's Home For Imaginary Friends to see if it will be a good place for Bloo to live. But once placed there, Bloo worries that Mac will tire of him and leave him there alone.
With Madame Foster's birthday party only a half hour away, Frankie finds out that she has to get streamers. Bloo and his friends come with her to the mall to find Madame Foster a gift. Instead Frankie loses sight of all of them and Bloo insults numerous vendors when he can't afford anything.
Bloo is forbidden from opening a secret door, so obviously he opens it. Behind it was a room filled with scribbles that soon infests the entire mansion. Mac feels sorry for the scribbles, which are the imaginary friends of babies, and tries to free all of them.
Already on Mr. Herriman bad side for breaking rules, Bloo makes the mistake of ruining a bust of Madame Foster. After many numerous attempts to repair the shattered bust, Bloo realizes the only way to glue the bust back together is by breaking into Mr. Herriman's office.
Bloo shows Mac how he can see his house from the roof, but then the two of them get lost on their way to dinner. Meanwhile, in the dining room, the rest of the household waits impatiently for their food.
Frankie wants to get interviews of imaginary friends for the Foster's Home website in the hopes that the internet can speed up their getting adopted. But when Mr. Herriman sends Frankie to fix a picture frame, Frankie leaves Mac to get the interviews. During the process, Mac tapes some embarrassing footage of Mr. Herriman.
Berry, the newest imaginary friend to move into the house, develops an obsessive crush on Bloo that threatens to ruin his friendship with Mac.
"Seeing Red" Terrence creates the imaginary friend Red to destroy Bloo, but despite all the mean things Bloo initially does to Red, the two become friends. When Terrence finds out, Red turns on his maker. "Phone Home" Bloo finds out that Wilt has won monthly awards for rescuing imaginary friends and vows to outdo him. Unfortunately, Bloo instead tries to bring a man in a cellular phone suit that with a stuck zipper into the home.
Mac is worried that Bloo will be adopted on "Adopt-A-Thought" Saturday if he goes out from to help with the adoptions. Jealous that all his friends are outside, Bloo tries to find a way to join the fun and get some attention.
Wilt, Coco, and Eduardo finish watching a scary movie and think they see a ghost in the house when they run into a sickly white Bloo. Frankie takes Mac home, but then finds herself trapped at the front door in a storm trying to get into the house and face to face with a frightening hooked-handed man.