Inventor Uncle Ned has made a startling discovery—that clouds are alive and can be transformed into common objects! He gives his nephew Talmage the assignment to take a transformed cloud with him, in the shape of a pen, to watch it and see what it says and does.

However, Talmage soon learns that THIS cloud is nothing but trouble. It has a strange malady called 'Insult-O-Mania' which makes it insult everyone it meets! Talmage quickly finds himself in big trouble at school and everywhere he goes. But when he and his cloud face an unexpected enemy, the insults by Talmage's cloud bring them to the brink of complete disaster!