Marge kicks Homer out of the house after Moe convinces him to stay out all night on Christmas Eve at his bar. The Depressed, Homer takes a lonely walk through Springfield instead of being with his family.
Homer plans to fulfill Marge's wish of leaving work on time and arriving home to celebrate Christmas with his family. However, he stops on the way home for a drink at Moe's, and when he says it's time for him to get home Moe convinces him to stay out all night on Christmas Eve when Moe admits to being lonely and depressed. Homer loses track of time and when he finally gets home, Marge is enraged at him and kicks him out, saying she does not want him in the house on Christmas.
Homer then leaves on an odyssey through a deserted and chilly Springfield, with Moe compounding his sadness by avoiding him when Homer shows up to try and talk to him (and to add insult to injury, Homer's car gets towed with his cell phone frozen inside it).
When Marge tells Bart and Lisa she is not inclined to forgive Homer, Moe climbs down the the family's chimney and explains to Marge that he was the reason why Homer was out late on Christmas Eve. Marge tries to call Homer, but because he lost his phone, she ends up going out to look for him. Homer ends up at the miserable local movie theater to watch a depressing Life is Beautiful-type of film around other lost souls. After Marge searches through the city and Homer ends up at a depressing party for mall workers, they each have epiphanies: Homer says that being without his family at Christmas is much worse than being with them, and Marge says that she shouldn't always assume Homer is doing stupid things for no reasons. The two finally reconcile and look forward to a happy new year.