Homer witnesses a robbery at the Kwik-E-Mart, and he identifies Krusty the Clown as the culprit. Krusty is arrested, tried, jailed, and replaced on the show by Sideshow Bob. Lisa and Bart are adamant that Krusty is innocent, so they examine the evidence, and they conclude that he was framed. Eventually, they uncover evidence proving Krusty's innocence and showing that the robber was Sideshow Bob, who framed Krusty. When Bart confronts Bob, he admits to the crime and is sent to jail, while a grateful Krusty is released and thanks Bart for believing in him.
The episode begins with Bart, Lisa and Maggie watching Krusty the Clown on TV. Krusty launches into the TV screen in a motor car. During the show a reluctant and unhappy Sideshow Bob is launched from a cannon, as the wish of a girl as it was her birthday, also an episode of Itchy and Scratchy is aired (titled: Burning Love). Marge is hurt by the 'unnecessary violence' in the show, but Lisa points out if cartoons were meant for adults, they'd put it on prime time. Marge calls Homer at work and asks him to stop on his way home to pick up some ice cream. Homer asks what the occasion is, and shudders when he learns that Patty and Selma are coming over later to show slides of their vacation which turns out to be very boring. Homer stops at the Kwik-E-Mart for ice cream on the way home, and while there he witnesses Krusty rob Apu at gunpoint. Cut quickly to the Simpson house, as the rest of the family watches Patty and Selma's slides. Cut back to Homer, who gives a description of Krusty to the police. Meanwhile at Krusty's apartment, Krusty is relaxing with a drink when a SWAT team busts down his door and takes him into custody.
At the police station Homer identifies Krusty as the armed robber. Homer finally makes it home just as the news report about Krusty's arrest comes on the air (with Emmy award-winning Kent Brockman's stand-in, Scott Christian "Kent Brockman is off tonight" ). Bart is devastated that his idol Krusty could have done such a thing, but later determined that someone had framed Krusty.
On the news, Kent Brockman reports on the upcoming trial and history of Krusty the Clown including the fact that Krusty has a pacemaker. Reverend Lovejoy calls for a public burning of all Krusty merchandise. The next day as Krusty walks up the steps to the courthouse Bart and Lisa watch in disbelief and Bart notices that Krusty has small feet. Inside the courtroom during the trial, even after Bart begs him not to, Homer, being called as a witness, points out Krusty to the jury as the armed robber. Later back at the house, Homer and Marge gather up all the Krusty merchandise in the house and head to the public burning.
An upset Bart watches as the pile of merchandise goes up in flames. The next day at the trial, it is revealed after being asked to identify some evidence that Krusty is illiterate. Later, the jury reaches a guilty verdict. At the Simpson house, Lisa and Maggie watch Sideshow Bob who has now taken over for Krusty on TV. When Bart walks in and sees this, he is upset. He tells Lisa he thinks Krusty is innocent and he convinces Lisa to help prove Krusty's innocence.
Bart and Lisa go to the Kwik-E-Mart to examine the crime through the security camera footage. They saw that Krusty, before the armed robbing, used the microwave oven at the checkout counter to roast a pastry while reading a magazine. Lisa notices that the microwave has a sign warning that pacemaker users should keep away, and she points out that Krusty implanted a pacemaker due to a fulminating heart attack he suffered a few days prior. She also recalls that Krusty could not be reading the magazine because he is illiterate (he does not know to read). Upon learning these two clues, she realizes that Bart was right and accepts the fact Krusty was framed for a crime he didn't commit. Lisa asks him if Krusty has enemies who hated him enough to take Krusty down. Bart suggests they can ask Sideshow Bob and he might identify any known enemies who want to see Krusty suffer and cancel his show. Cut to Sideshow Bob who after just finishing taping of his show enters his changing room and emits an evil diabolical laugh.
At the television studio Bart, Lisa, and Maggie pay a visit to Sideshow Bob, he dismisses them because his show is about to start, but he offers them free tickets. While in Bob's room they notice his enormous feet. In the audience a visibly saddened Bart watches the show. When Sideshow Bob notices Bart's sadness he invites him on stage for a new psychological segment called Choices. While on stage Bart reveals he is sad because he thinks that Krusty was framed and wrongfully jailed, however, Sideshow Bob tries to convince him otherwise. While Sideshow Bob is talking to the audience he mentions that he has "big shoes to fill". "Big shoes to fill", resonates in Bart's mind and suddenly everything clicks for him, causing him to not only figure out the third and final clue, but also the mystery robber's identity: Sideshow Bob. The former sidekick had the most to gain from Krusty's downfall. Unlike Krusty, who has little feet "like all good-hearted people", Bob has feet large enough to entirely fill his clown shoes, and therefore he yelled at Homer when he stepped on his feet before the robbery whereas Krusty would not have even noticed (due to Krusty's small feet for his huge clown shoes).
Outraged by the truth, Bart rightfully levels his accusation towards Sideshow Bob. He grabs the microphone and contends to the audience about his discovery. Bart then proves his point by smashing the end of Bob's clown shoe with a mallet. This causes him to scream in pain and yell at him for hitting his foot. The kids are shocked to hear the words uttered on the security tape and turn against Sideshow Bob for what he did to Krusty. Bart hits his other foot, causing him to fall down. Then he removes Bob's shoes and reveal his huge feet on TV. While watching the show, the police realize he's right and they overlooked one key piece of evidence that could've kept Krusty out of jail. Then, Chief Wiggum orders them to immediately go to the studio and arrest Sideshow Bob for the robbery.
Outside the studio, an arrested and exposed Bob dramatically confesses to the crime. He reveals that he framed Krusty for the Kwik-E-Mart armed robbery out of frustration because he finally had enough of constantly being on the receiving end of the clown's humiliating antics for more ratings. Bob felt his intelligence was wasted on the show and wanted it gone so he can make an educational program where his intelligence is appreciated by the public. It was then he swears revenge on the Simpson kids, especially Bart, for foiling his plan. As Bob is arrested, he makes reference to Scooby-Doo, by saying "I would've gotten away with it, if it hadn't been for those meddling kids." While being carted off to jail, he warns criminals to start treating children as equals because they were smart to catch him and will do the same to them too. The charges against Krusty are dropped and he now regains the trust of the community. The police and the citizens apologize to him for their misunderstanding, and Homer apologizes for fingering him in court. Grateful to be free, Krusty forgives the populace for their wrong accusations and thanks Bart for standing up for the truth and sticking to his convictions. The episode then ends with Bart proudly tacking up a photo of him and Krusty on a wall. He happily goes to bed with his room refurnished with new Krusty the Clown merchandise.
Sideshow Bob makes his first appearance as a major character in this episode. However, his official first appearance was in the background of a scene in the season one episode The Telltale Head. Bob's design was revamped, with his original afro being turned into his now-famous "palm tree" style. James Earl Jones was originally cast as Bob, but the producers decided to try Kelsey Grammer. Also making their first appearances in this episode are Kent Brockman and Scott Christian.
The episode finished thirteenth place for May 23–29, 1990, with a Nielsen rating of 16.4. The episode received positive reviews from critics. Matt Groening has listed it as his ninth favorite episode of the show and said "I have a peculiar love of TV clownery". In a DVD review of the first season, David B. Grelck gave the episode a rating of 3/5. Colin Jacobson at DVD Movie Guide said in a review that "throughout the episode we found great material; it really seemed clear that the show was starting to turn into the piece we now know and love. It’s hard for me to relate any deficiencies" and added that "almost every Bob episode offers a lot of fun, and this episode started that trend in fine style."