Homer and Marge attend a candy convention and hire a babysitter for the kids. After the convention, Homer gives the babysitter a ride home. He notices a very rare Gummi candy stuck to the seat of her pants, so he reaches out and grabs it. Homer is accused of sexual harassment, and the whole town and the media are against him until Groundskeeper Willie saves the day by giving proof of Homer's innocence.
Homer and Marge attend a candy convention and hire Ashley Grant, a college student, to babysit Bart, Maggie and Lisa. At the convention, Homer outfits Marge with an oversized trenchcoat and is vigilant in smuggling out as much candy as possible in her pockets, to the point she has difficulty even moving. Until, a Gummi Venus de Milo catches his eye. Using Marge as a distraction, Homer is able to steal the show's most valuable and rarest candy, the Gummi Venus, using a Buzz Cola and Poprox grenade to escape, possibly injuring many people.
That night, Homer searches for the Gummi Venus but is unable to find it. Marge reminds him to take Ashley home and Homer grudgingly agrees. While driving back to the college, Ashley misinterprets Homer's frustration of losing the Gummi Venus as sexual anger and tells him to pull over and let her out. When Ashley is exiting Homer's car, he sees the Gummi Venus stuck on the back of her pants and innocently grabs it, and Ashley turns around to see Homer drooling lustily, anticipating finally getting to eat the Gummi Venus. Misinterpreting this poor tact for a deliberate sexual advance, Ashley runs off screaming in terror while Homer gleefully eats the candy.
The next morning, an angry mob of college students marches onto the Simpsons' lawn and claims that Homer sexually harassed Ashley. Homer tries to explain his actions, but the crowd is not interested in anything that might defend him and continually harasses Homer, following him everywhere, including work. Rock Bottom, a tabloid news show, wants to interview him about his predicament and Homer immediately agrees to be interviewed. However, the interview is heavily (and severely) edited into a totally inaccurate segment where Homer is portrayed as a total pervert. Things go from severe to worse as a media circus arrives at the Simpson home and provides 24-hour coverage of Simpson household events such as Marge letting the cat out and the family watching TV. In the process, the media practically labels Homer as the worst person in the world and claim that everything he does, including slipping in the shower, is an act of perversion. Making matters worse, the FOX network airs a movie titled Homer S.: Portrait of an Ass-Grabber (starring Dennis Franz as Homer) which makes Homer look even more evil. Lisa and Marge suggest that Homer videotape his side of the story and air it on a public access TV channel, but all he succeeds in doing is angering an old-time bicyclist.
After seemingly doing everything in his power to set the record straight, Homer finally gives up and starts living permanently in a secluded back room for what looked like the rest of his life. However, Groundskeeper Willie also sees Homer's public TV speech, and arrives at the Simpson home confessing that he has committed real acts of perversion by videotaping couples having sex in cars. But in the process, captured on video tape what happened the night Homer took Ashley home. When the tape begins, it originally looks like he's reaching for Ashley, but after she run's off, it is seen that Homer is holding the Gummi Venus which he then devours. Lisa is ecstatic seeing how this completely clears Homer's name. They take the video to the college and show it to Ashley and her colleagues. She apologizes to Homer saying she thought he was a monster but he really was an honest but misunderstood man. Shortly after the media also apologize for labeling Homer as a pervert. Later, the Simpsons watch Rock Bottom on TV. When the show retracts its accusations against Homer, they all cheer. The very same episode, however, runs a segment that labels Willie as a disgusting voyeur ("Rowdy Roddy Peeper") and Homer immediately declares that Willie is evil. Marge reminds him that Willie was the one who saved his reputation and asks Homer if he learned anything from his experiences, to which Homer cheerfully replies that he hasn't learned a thing.
Marge and the kids leave the living room with disgusted looks, and Homer looks around a couple of times to make sure they're gone. Then he hugs the TV and says, "Let's never fight again."
Greg Daniels, the writer of the episode, originally pitched this episode as being more centered on Lisa's and Homer's opposing ideas on feminism. Eventually, the episode became more a satire of the media and shows like Hard Copy. David Mirkin, the show runner at the time, felt very strongly about the "tabloidization of the media" and has said that the episode is as current today as it was at the time and things have since gotten worse. Several gags in the episode are based on what real-life shows like Hard Copy would do, such as making people appear guilty without a trial as well as completely invading their privacy by setting up camp outside their homes.
According to David Mirkin, this episode is very highly ranked among Simpsons fans. In Entertainment Weekly's top 25 The Simpsons episodes in 2003, Homer Badman was placed eighteenth. The Quindecim, a college newspaper, made their own top 25 list, placing this episode at 15th place.