Homer sees an advertisement for Dimoxinil, a new "miracle breakthrough" for baldness. He visits a store which sells Dimoxinil, but at $1000 it is far out of Homer's price range. At work, Lenny suggests Homer pay for Dimoxinil through the Springfield Nuclear Power Plant medical insurance plan. The druggist yells that Dimoxinil is a frivolous product that is not covered by any medical insurance, but whispers to Homer that he will arrange an under-the-table trade. Homer successfully applies the drug, and after using it, he wakes up the next day to the thrill of having a full head of hair, and runs throughout the town blissfully. At work, Mr. Burns surveys the security monitors to find a new person to promote to an executive position. He sees Homer with hair and, mistaking him for a young go-getter, chooses Homer for the job.
As he is about to become an executive, Homer tries to look for a good secretary, but all the applicants fail due to being seductive young women – until Homer finds a man named Karl, who earnestly persuades Homer to tell himself that he deserves everything he has and is the finest creature God ever created. Homer eventually picks Karl, and they go shopping for a suit. At an executive board meeting, Homer is singled out by an impressed Burns to give a suggestion to increase worker productivity, and Homer meekly suggests that he give more tartar sauce in the lunch room, which Mr. Burns does. Following the increase in tartar sauce distribution, Mr. Burns is glad to hear that workplace safety is on the up-and-up and accidents are down. Smithers remarks that all the past accidents were either caused by Homer or believed to be traced to him. However, Burns tells Smithers to stop being negative and even accuses him of harboring jealousy towards Homer. Homer forgets his wedding anniversary, but Marge forgives him due to his new demanding schedule. Karl covers for Homer by hiring a singing telegram service to serenade Marge with "You Are So Beautiful", which Marge loves.
Homer becomes successful and receives the honor of being given the key to the executive washroom. Smithers begins to feel jealous of Homer for his high standing with Mr. Burns and searches Homer's file, finding the damaging information he seeks in the case of insurance fraud that gave Homer hair in the first place. Smithers gleefully prepares to fire Homer for the fraud, but Karl takes the blame for Homer and writes the $1000 check to repay the company. Frustrated, Smithers is instead forced to fire Karl, who has sacrificed his own job to save Homer's. Homer is deeply saddened to see Karl go after all Karl had done for him, including lending Homer his umbrella before finally leaving in the rain. Homer is invited to give a speech at the next meeting, and Smithers does his best to ruin Homer's confidence. Homer is nervous about giving the speech without Karl, but reasons that as long as he has hair, everything will be fine.
Meanwhile, at home, Bart uses some of the Dimoxinil in a misguided attempt to grow a beard. When Homer enters and catches Bart, Bart accidentally drops the Dimoxinil, spilling it all onto the floor. By the next day, Homer has lost all his hair and, bald again, arrives at the meeting. His fears are alleviated when Karl appears with a pre-written speech for him, but Homer is still convinced he is incapable of accomplishing anything without his hair. Karl impatiently tells Homer what he had been trying to teach him all along—that all of Homer's achievements had been the result of his own will and effort, not of his hair. Karl urges Homer to think higher of himself and give the speech, even kissing him on the lips to prove his point. Reassured, Homer presents a brilliant speech on the Japanese art of self-management, but the audience is unable to take him seriously because he has no hair. Everyone leaves, leaving Homer greatly disappointed. Burns angrily summons Homer, threatening to fire him, but reveals photographs of himself with strawberry curly hair in his younger years when girls flocked to him until he went bald, and as a fellow sufferer of male pattern baldness, sympathizes with Homer's situation and merely demotes him back to his old position rather than terminating him.
At home later that night, Homer confesses to Marge he is afraid that his life has returned to a dead-end job, that his kids will be disappointed because he can no longer buy the things for them he promised he would, and most of all that Marge will no longer love him as much. However, Marge reminds Homer that his safety inspector job has always brought food to the table, and that the kids will get over not being spoiled. Marge then reaffirms her love for Homer as they sing "You Are So Beautiful" together into the night.