Krusty is forced to add a female character named Princess Penelope to his show in order to attract more female viewers. She immediately overshadows Krusty as the ratings improve. Bart and Milhouse want to get the show back to the way it was, but the situation gets more complicated when Krusty and Penelope fall in love and decide to get married. Meanwhile, Homer, Lenny, and Carl consider working at a competing nuclear plant when Mr. Burns cuts off their daily doughnut service.
Krusty, after performing a show, is approached by two network executives who tell him they need to make big changes in the show to increase ratings of girls. Krusty refuses, but they are ready to make a reality show to find his replacement. Desperate to stay in this sweet gig, he agrees. The next show, he introduces Princess Penelope. Girls like Lisa are fascinated with Penelope, but boys like Bart and Milhouse are almost sick watching it. In short notice, Princess Penelope's popularity grows to stratospheric levels, quickly eclipsing Krusty in his own show, to the point that all his merchandise is replaced with Princess Penelope's. After being persuaded by Bart to get back on track, Krusty confronts Penelope, intending to fire her from the show, but she confesses her love for him, revealing that she is a childhood fan of Krusty. Knowing this, Krusty not only changes his mind about canning Penelope, but they also enter a relationship.
Meanwhile, Marge gets a fryer and starts making donuts. Homer doesn't eat, expecting there are going to be donuts at work. However, Mr Burns cuts donuts from being at work again (he believes that it's the 1930s, the same era of the Great Depression, hence the budget cuts). Homer, Lenny and Carl decide to go drinking at Moe's Tavern. There, they meet a businessman, who's looking for new Nuclear Power Plant workers. He leads the trio on a guided tour of Capital City's power plant, which turns out to be much better. When they go to quit, Mr. Burns manages to convince them to stay by providing them 'special' donuts at the plant.
Meanwhile, Krusty and Princess Penelope's relationship grows, and before long, Krusty asks for his co-star’s hand in marriage. Bart and Milhouse explain that Krusty has married many women before, and all of them had become very unhappy. Krusty agrees and breaks up with Penelope at their wedding, though she takes it amiably, kissing him before she leaves. Days later, she is singing in Paris, and begins showing signs of missing Krusty. She then goes to a nearby bridge, looking down at the water of the Seine River. A boat passes by, and she sees Krusty's reflection in the water. She turns around, expecting to see him, only to see nothing. Krusty is actually there, though; he was just in the water, having fallen off the boat. She flings herself in the water, and the two float down the Seine, staying afloat with Penelope's wooden guitar's case.