Third-grader Ellen Tebbits lives with her parents on Tillamook Street in Portland, Oregon. The book opens when Ellen heads to her dance class at the studio run by the mother of a classmate, Otis Spofford, who is always teasing her. When she arrives, she heads to change in a broom closet so the other girls cannot see her terrible secret: Ellen is wearing woolen underwear. After class, she accidentally walks in on a new girl in class, Austine Allen, who's also wearing the dreaded underwear. Soon, the two become best friends. Other chapters in the book deal with Ellen's first-ever time going horseback riding, her efforts to bring a giant beet to school for show-and-tell, and Ellen and Austine's efforts to put up with the obnoxious Otis' antics.