Along with most of the town of Springfield, the Simpson family enjoys the Krusty’s Kristmas on Ice show at an indoor ice rink. Krusty the Clown emcee’s the event’s various acts, including an Elvis Stojko skating performance and a skating performance by Krusty and Sideshow Mel stunt doubles. The main act features a reindeer, a candy cane and a snowman, who are all fretting over a green monster named, the Grumple (A parody of Dr. Seuss’ Grinch character). As the Grumple advances on the Christmas characters, threatening to steal their Holiday Cheer, the characters mistakenly stumble backward over a wooden basketball court that is being setup by a crew lead by Wiseguy. All the Christmas characters are enraged that their show is being cut short and they begin brawling with the Utah Jazz as they try to warm up for a basketball game. Marge and the kids decide to get up and leave, and Homer is spotted down on the ice grappling with the Grumple and demanding back the Holiday Cheer.
On Christmas Eve at the Costington’s department store, a sad Lisa sits on Santa’s lap and explains that the one present she wants, the Malibu Stacy Pony Beach Party Set, is sold out everywhere. Santa Claus, played by Gil, feels sorry for Lisa and he goes back to the stockroom to find an extra play set he had seen earlier. An overjoyed Lisa thanks Gil as a cashier rings up the sale. As Marge and the kids exit the store, an angry Mr. Costington comes out of his office and berates and fires Gil for selling the Malibu Stacy play set that he had set aside for his daughter. Marge and the kids witness the scene and feeling sorry for Gil, Marge invites him over for Christmas Eve dinner.
Later at home after dinner, Gil and the rest of the Simpson family gather around the piano and sing songs. When they finish, Gil gets up to grab his coat and leave, but Marge insists that he stay the night, citing the fact that it’s late and cold outside. A thankful Gil accepts Marge’s offer. On Christmas morning an excited Bart and Lisa charge down the stairs to open their presents, but they are shocked to see their living room piled high with cardboard boxes and clothes. Gil explains to the family that he figured since he had a place to stay that he would go down to his bus locker and retrieve his personal belongings. As Marge and Homer survey the situation in the living room, the Grumple can be seen looking through the front window brandishing a knife and offering threats to Homer.
Later on Christmas morning, Homer tells Marge that she has to inform Gil that the invitation was only for the night and that he can’t stay. But when Marge approaches Gil to tell him he has to leave, Gil’s weak demeanor and lack of a job make Marge reconsider and she allows Gil to stay for a few more days.
By the time New Year’s Day arrives, Gil has made himself right at home with the Simpson family and when Marge once again tries to tell Gil that it is time for him to move on, Gil explains to her that he is waiting for a call and a job offer from the his old boss at Jackpot Realty. Marge once again takes pity on him and cannot bring herself to ask Gil to move out. Cut to January 16, Martin Luther King Day, Gil is still living with the Simpsons and an impatient Homer orders Marge to kick Gil out; he explains to Marge that her inability to say “no” (stemming from a childhood trauma, when she would refuse to hide Patty and Selma's cigarette packs in her dollhouse, and they stuffed her in the dollhouse out of retribution) has caused the whole situation with Gil, but Marge still can’t bring herself to order Gil to leave.
At Moe’s Homer complains about the situation with Gil and Carl and Lenny offer some advice, telling Homer that he has to let Marge throw Gil out otherwise she will never learn to assert herself. Just then the Grumple appears, he grabs a pool cue, breaks it in half and advances toward Homer. A bewildered Homer hits the Grumple in the head with a beer bottle and knocks him unconscious.
A shot of a tear-away calendar is shown and the days and holidays start to float by: On Valentine’s Day Homer and Marge are about to “snuggle” in their room when Gil interrupts. Just as Marge is about to throw Gil out, the phone rings downstairs and a hopeful Gil thinks it could be his old boss offering him a job. Lisa calls out from downstairs to tell Gil that it is just his foot doctor on the phone and a depressed Gil slumps against the wall feeling sorry for himself. Once again Marge is thwarted from telling Gil to move out. On St. Patrick’s Day Gil invites some of his buddies over for some late night singing and drinking, while upstairs Homer and Marge struggle to get some sleep. At school on September the 8th, International Literacy Day, Bart and Lisa are upset to find that Gil now mooches their lunches.
The day after Thanksgiving, an angry Marge still hasn’t been able to tell Gil to move out. As Marge rakes leaves in the backyard and mutters about the trouble Gil has been, Ned Flanders approaches and thanks Marge for the Christmas card he received. Marge doesn’t recall sending out Christmas cards yet and when she takes a look at the picture and sees Gil has placed a photo of himself over the Simpson family photo and mailed it out as a Christmas card, Marge finally reaches her boiling point. She marches into the house dead set on kicking Gil out, but she is surprised to find that Gil has suddenly moved out and is in Scottsdale, Arizona, after his old boss called and gave him a job.
Marge is still bent on saying “no” to Gil and she insists on traveling to Scottsdale so she can finally get the pleasure of saying “no” to him. As Marge drives the family through Scottsdale, they spot Gil’s image and name on billboards, park benches and buses. Even though Gil has become a big shot and a success Marge still has urge and the need to tell Gil “no.” At the Jackpot Realty office, Gil leads a meeting and motivates his realtors to go out and sell. The realtors clearly look up to Gil and are impressed with his selling capabilities. Just then Marge barges into the meeting and confronts Gil. She jabs him in the chest while letting out all of her built up anger. When the rest of the realtors see the successful big-shot Gil being pushed around and cowering in front of Marge they all realize that he isn’t as great as they thought he was. After Marge’s display of anger and Gil’s display of weakness, Gil’s boss charges out of his office and fires Gil on the spot. Marge is horrified when she realizes that she has just cost Gil his job.
Cut to a new home in a suburb of Scottsdale, the mailbox reads The Simpsons and Christmas carols can be heard playing inside the house. Inside on the piano, Gil leads the family in song, when suddenly a family of Grumples arrives at the doorstep, Homer lets them in and Gil, the Simpsons and the Grumples continue happily in song.
It is the ninth Christmas-themed episode. This episode aired exactly 17 years after the very first episode ("Simpsons Roasting on an Open Fire"); it was also the fifth episode to air on this date. Elvis Stojko guest stars as himself.
A Christmas-themed opening sequence was animated for this episode and was later re-aired with "The Burns and the Bees". Not counting the "Treehouse of Horror" episodes, this is the second time that the title sequence is radically different from the norm.
It begins with two lines of instrumental "O Christmas Tree" and then the normal theme music begins. This version is similar to the normal version, except for several key differences:
Everything outside is covered with snow
Bart's skateboard has been replaced with a snowboard
Everyone is wearing winter clothes
Mr. Burns and Smithers have been replaced by a Scrooge-esque Burns and Ghost of Marley-esque Smithers, and there are several Christmas banners in the plant
Lisa's saxophone solo is a jazzy version "Deck the Halls"
Bleeding Gums Murphy, who is now deceased, has been replaced with Jasper in a Santa costume. Maude Flanders, however, remains in the pan across Springfield, despite having also died.
Marge and Maggie's supermarket and car sequence have been cut, due to being unable to make a Christmas themed version.
In the end, the family sits on the couch and the camera then pulls out to reveal that the family was reflected in a Christmas ornament, which rests on a Christmas tree.
Dan Iverson of IGN gave the episode the headline of "Worst Simpsons Christmas episode ever!". He explains that though the story wasn't bad, it was merely told poorly, especially the area were Gil gets a new household had made no sense. He writes: "Gil's storyline wasn't the only thing that didn't make sense, as the ongoing joke of the Grumpo made less sense than most anything from this season." Though he explains that even though the episode wasn't "all bad", he felt there were a couple of comedic bits to keep the show afloat, such as the unique opening sequence.