The novel begins with Greg Heffley getting ready for his first day in middle school, when he is teased by his older brother, Rodrick, because his mother bought him his school supplies. Greg also has a spoiled little brother called Manny, who gets everything he wants and never gets in trouble. His father Frank does not enjoy Greg’s lifestyle of playing video games all day instead of going outside and playing sports.
During his first day of school, Greg is forced to sit with the school nerd called Fregley, whom he tries to keep distance from. He is unsure that his friend Rowley Jefferson would be able to fit in because he considers him to be immature. As a way to boost their popularity, Greg and Rowley decided to join the wrestling team, Greg quits the team after he lost a match against Fregley.
On Halloween, Greg and Rowley went out for trick-or-treating, but they are bullied by teens who sprayed them both with a water-filled fire extinguisher. Greg threatens them by telling that he was going to call the cops, but the teens began chasing them. Greg and Rowley both hid at Greg’s grandmother’s house until the teenagers left.
During Christmas break, Greg and Rowley decided to play a game in which Rowley had to ride a bike while Greg tried to knock him off. While playing, one of the balls that Greg threw got under the front wheel, causing Rowley to fall off and break his arm. When he returns to school with a cast, the girls started nursing him (carrying his books, etc) which made Greg jealous. After Rowley healed up, he and Greg joined the safety patrol in which they walk the younger kids to their homes.
One day, while walking the kids home, Greg decided to scare the kids by chasing them with a stick with worms. A neighbor contacted the school and told the principal about the usual behavior. The school principal fired Rowley because Greg was wearing his safety patrol jacket and the nametag that the neighbor saw was Rowley’s. Greg wanted to come out and tell the truth but he doesn’t. It was after some time that Greg confesses, Rowley was hurt and broke his friendship with him.
Greg tried to becomes friends with Fregley to make Rowley jealous, although he makes him uncomfortable. He then auditions for the school production of The Wizard of Oz, where he lands the role of a tree.
During the opening performance, Rodrick brings a video camera to film the play. Greg due to his nervousness to sing, confused the other actors, who also failed to sing. Patty Farrel, who played the role of Dorothy got frustrated and insults Greg. So, Greg threw a prop at Patty and then everyone got into a fight.
The teenagers from Halloween came back, this time, the teenagers forced Greg and Rowley to eat a cheese that was on the floor. The cheese had become moldy since it had been left on the ground years ago. Greg said that he can’t because he is allergic to lactose and he can die if he eats it. The teenagers left when Rowley eats the cheese. The other students noticed that the cheese was missing, thinking that someone destroyed it. But Greg tells them that he decided to throw it away because he was sick of seeing it there. Because of this, nobody suspects of Rowley having the “cheese touch.”
Greg and Rowley resolved their issues and made plans to spend the entire summer vacation playing games.