Springfield Elementary School holds a school fair, where Lisa purchases a caricature of herself drawn at a carnival booth. She is horrified at the unflattering drawing and the reaction of the surrounding crowd. Homer wins the fair's raffle, with the grand prize being a ride in the Duff Blimp. Back at home, Lisa is in tears because she feels unattractive. Homer sees a TV advertisement that says Laramie Cigarettes is sponsoring this year's "Little Miss Springfield" pageant, and decides to enter Lisa to boost her self-esteem. The entry fee for the pageant is $250, so he sells his Duff Blimp ticket to Barney to raise the funds needed. Homer excitedly tells Lisa he has entered her in the pageant, but she refuses. However, Marge tells Lisa that Homer sold his Duff Blimp ticket to pay the entry fee, and she realizes her father's sacrifice and enters the pageant.
At the pageant's registration, Lisa meets a formidable competitor named Amber Dempsey, a blonde girl who cheated by using eyelash implants from Paraguay to make her look cuter. In preparation for the pageant Lisa receives makeovers at the beauty parlor, training from her brother, and encouragement from her family. The day of the pageant arrives, and on-stage Lisa explains her aim to make Springfield a better place, while Amber wins the crowd's adoration by batting her large eyelashes. Lisa's talent is a jazzy medley of "America the Beautiful" and "Proud Mary". After Krusty the Clown's interview segment, Lisa is announced as the runner-up and Amber the winner. At Amber's first official appearance, a thunderstorm creates a lightning bolt which strikes her metal scepter. She is hospitalized for her injuries, and Lisa is crowned Little Miss Springfield.
One of Little Miss Springfield's duties as spokesperson for pageant sponsor Laramie Cigarettes, is to lure a younger demographic into smoking. Instead, Lisa protests against the dangers of cigarettes at her appearances, and also vows to target the corruption of Mayor Quimby. Quimby and the Laramie officials look for a way to dethrone and silence Lisa. They find a technical error on her entry form: Homer wrote "OK" underneath the instruction "Do not write in this space". Amber is recrowned Little Miss Springfield. At home, Homer is upset that he cost Lisa her title, but Lisa reminds Homer that he entered her in the pageant to help her self-esteem, and thanks him because it worked. Homer requests that she remember it "the next time I wreck your life", to which Lisa gladly agrees and embraces him.