Two criminals appear to be boarding a small boat nearby a circus at the docks, and they are discussing about their recent robbery at a yacht. As the second criminal climbs in, the first criminal notices bubble by the side of their boat. With curiosity, he peers over to investigate, and two green eyes leer at him. Ripjaws' hand then reaches out to the criminal and drags him into the water. The second criminal goes to investigate on the disappearance of his partner, and Ripjaws pops out of the water. He appears to be scared of Ripjaws, so he climbs back onto the pier and begins running. Ripjaws follows him along from the edge.
When the criminal stops at a nearby hot dog cart, he looks around to see if he's lost him. Ripjaws then jumps out from the water, and he backs up the criminal closer and closer to the hot dog cart. He bangs onto the cart, and tips it over, only causing to pour the oil out of the tank and surround Ripjaws. An electric wire suddenly ignites it, and flames surround Ripjaws, quickly drying his over-sensitive body. Ripjaws gasps for air, but he luckily found out that the deck was made out of something he can break with ease. He punches through it and falls into the water. Before the criminal gets away, Ripjaws comes back up again in front of the criminal, and grabs him in his jaw. He then tosses the criminal into a nearby Knock-Over-the-Can game attraction, knocking over all the cans. When the police finally arrive, the officers credit him to be all right for a circus freak, though he objects to the term, and corrects him by saying that he is a superhero. Ripjaws then jumps into the water and the officer comments that Ripjaws looks like a freak to him.
In the RV, Gwen notices a sign that reads "Zombozo's Traveling Circus of Laughs." Immediately, her excitement comes into play, and she wants to go. Grandpa Max as well says that he wants to go, saying that he hasn't been to a circus since he was a little kid. Ben, however, dislikes the idea, and says that the circus is only for little kids. Gwen points out to Ben that he is a kid. He immediately changes plans, and he pretends to be tired. Grandpa Max says that it is only eleven o'clock in the afternoon, but Ben clearly expresses that he is not satisfied about this.
Ben looks at the various pictures of Zombozo scattered about. Grandpa Max mentions that it looks like the whole town came to see the circus. Ben then gets an idea and he tries to convince that the circus is probably sold out of tickets, and just head on. But before Grandpa Max responds to his request, they find themselves in front of a freak show. The ringmaster is there, and he is introducing various circus freaks. The first is referred to as Thumbskull, and as his name suggests, his head is shaped much like a thumb. He also features incredible strength, and he demonstrates by bending a metal bar. Frightwig is next in the team. She has five orange tentacles that make her just as strong as Thumbskull. She demonstrates the strength of her hair by catching the tossed metal bar by Thumbskull and bend it even more. She then places it in a nearby anvil. The last of the group is referred to as Acid Breath. Like his name suggests, he breathes out a corrosive vapor. He demonstrates by melting the bar into a greenish liquid.
While the show is in session, Ben decides to sneak off. He then spots a tent marked "Keep Out", but he decides to look inside anyway. Zombozo is inside, and Ben eavesdrops on what he is talking about. He says to himself that his show will "knock them dead." His appearance is just like what any clown should look like, though only creepier and scarier. His nose is blue, he has rotted teeth, and he has strange bluish orbs on his coat, as well as a large one in his hat. He then shows his tongue to be pointed, and it is far longer than normal. Ben is quickly scared, and he runs into Gwen along the way. He screams, but realizes that it is just her. She questions Ben for his strange behavior. Ben just answers that he is not scared of anything. Grandpa Max then says that the show is about to start.
Inside the big tent, the ringmaster introduces Zombozo. He arrives in a clown car, and it is unbelievable how he is able to fit in. The audience laughs, but Ben is scared, feeling uncomfortable for being there. Zombozo leaves the car, and the car drives itself away. It then reaches the end of the ring, which then turns around and acts like a bull. Zombozo pulls out a red cape to attract it. The car then drives up to the cape, but disappears mysteriously in a puff of smoke and confetti. The audience continues to enjoy his act, and Zombozo then reveals a large machine behind him with blue orbs in the front of it. He powers up the machine, and the orbs glow. Ben finally decides that he's had it, and he excuses himself to go out and buy some popcorn. Grandpa Max asks Gwen what is wrong with Ben, but she says that she stopped trying to figure out his problem. Ben leaves, and Zombozo continues to joke around to keep people laughing. He says that everyone will "die" from laughter, and he guarantees that. He then says that he needs a volunteer, and he looks at Gwen. Zombozo comments that Gwen is full of like, but not for long.
Outside the tent, Ben says that there is nothing funny about clowns. Ben then hears glass breaking nearby. He decides to investigate, and he finds the same three freaks from the circus robbing the town. Thumbskull is robbing a jewelry store, Acid Breath melts through a car and steals the radio, and Frightwig uses her hair to tear-off the ATM machine from the wall. Ben decides to stop them, and he transforms into Wildmutt. Thumbskull then sees him, and acts as if though he's just an ordinary dog. Wildmutt mutters something incomprehensibly and attacks him. He manages to take down Thumbskull, and now goes after Acid Breath. Frightwig manages to grab Wildmutt, though she only ends up being dragged. Wildmutt stops nearby Zombozo's clown car, which found its way onto the street. Wildmutt tears the top open, and various stolen goods come out. Acid Breath tries to go after him again, and he breathes out the corrosive vapor straight at Wildmutt. Wildmutt was able to dodge it and ends up melting the clown car instead. Wildmutt knocks down the three once more, and Acid Breath has had it. He tells Thumbskull to get the boss.
Outside the tent, Ben says there's nothing funny about clowns. He then hears glass breaking. When he goes to investigate, he finds the three freaks robbing the town. Thumbskull is robbing a jewelry store, Acid Breath uses his ability to melt through a car and steal the radio, and Frightwig rips an ATM from the wall it's attached to. Ben says that it's time to play fetch and turns into Wildmutt. Upon seeing Wildmutt, Thumbskull tries to calm him down by saying "good doggy." Wildmutt mutters something incomprehensible and attacks him. Once Thumbskull is down, he tackles Acid Breath. Frightwig manages to grab Wildmutt, but just gets herself dragged a short distance. Wildmutt eventually stops at Zombozo's clown car, which has found its way onto the street. He rips open the top, causing money and various stolen goods to pop out. Acid Breath is annoyed by this and rallies his comrades, breathing corrosive vapor at Wildmutt as he does. Wildmutt dodges the attack, causing it to melt the clown car. He then knocks down all three once more. As Wildmutt advances on Frightwig, Acid Breath tells Thumbskull to go get the boss.
Everyone continues to laugh at Zombozo at the circus tent. This time, the machine he activated recently is now attached on his back with a tube. He says laughter is the best medicine, but in this case: for him. Thumbskull then arrives shortly after asking for his help. Zombozo scolds him on bothering him while he's eating. Thumbskull then tells him that they just ran into some trouble.
The battle continues between Wildmutt and the freaks, but he has already pinned both Acid Breath and Frightwig. Zombozo arrives shortly after, and this forced Wildmutt to let go. He jokes on Wildmutt's appearance, and then Zombozo gives him a quick beating, which sends him back into a nearby tower. Instead of fighting back, Wildmutt hides behind one of the supports in fear. Zombozo points out Wildmutt's cowardliness, but his minions don't really respond to this due to their previous beatings. He then orders his minions to bring the tower down on Wildmutt to end this. Wildmutt continues to cower in fear, not taking any consideration on any injures he may take. They head back to the circus when the tower was fully brought down. The Omnitrix then starts to do the deactivation process once they have left the area. Without any injures or scrapes, Ben crawls out of the rubble, relieved.
Those at the show are now walking around, as they chuckle to themselves. Grandpa Max is sitting at the steps, doing the same thing. Ben spots him and asks where the circus went, which now reveals that they are where the tent used to be. Grandpa Max seems to be disoriented and doesn't give a straight answer. Ben then realizes that Gwen is missing. Little does he know that Zombozo has kidnapped Gwen, and along with a few other people from the circus. They are held inside a truck as it drives down a mountain road. All of them are laughing mindlessly.
A disoriented Grandpa Max is driving the RV on the same road, in hopes of catching up with Zombozo. Ben tries to act brave, though his voice betrays his fear. Grandpa Max asks what seems to bother him, so Ben admits his fear of clowns. Grandpa Max says that everyone has a specific fear. Grandpa Max says that he once had a phobia on heights, and he got over it by climbing a water tower. Grandpa Max appears to become weaker, and collapses after his point to Ben. Ben is then forced to take the wheel to prevent them from a crash. Lucky for them, they aren't very far above the ground, so the RV lands without trouble. With the RV now off the road, Ben takes an attempt to dodge trees in front of them. He then sees the cliff nearby in front of them, and with panic, he tries to stop the RV by using the RV's awning as anchors to stop it. The awnings of the RV as anchors fail miserably. With a quick reflex, Ben turns the wheel and hits the brakes, and the RV stops just before they fall off the edge. The RV stops, and Ben takes a quick check on Grandpa Max. He then explains that he's very sad. Ben asks what happened to the big tent they were in, and Grandpa Max has a flashback of the event. He remembers that everyone continued to laugh at Zombozo, and laughing spirits were taken from each person and taken into Zombozo's machine. Zombozo explains that the laughter fed his soul. Grandpa Max then says that Zombozo has the ability to steal happiness. Ben then realizes immediately that Zombozo must have Gwen with him.
At the new location of the circus, the freaks set up. Ben watches them from behind some cargo boxes. He turns around, and gets startled by one of Zombozo's posters, which then causes him to knock over a box. The three freaks catch his attention. They approach while Ben tries to activate his Omnitrix. For some unknown reason, it does not want to operate and be able to be pushed down. Ben continues to argue with the Omnitrix, and the freaks start their attack. But they find Ben nowhere to be found after melting the stack of boxes down. In another stack, the flash of the Omnitrix being activated is seen, while Thumbskull notices and decides to take a gander. Upgrade appears, merged already to an automatic ball-thrower. Thumbskull attempts to attack him, but Upgrade uses the machine to shoot baseballs to knock him out. He then goes after Frightwig, though her quick reflexes and tentacle hair allow her to block off the baseballs. Ben though was finally able to take her down and tie her hair up, while knocking her out with another ball. Acid Breath then attempts to melt him with a stream of acid. Upgrade just asks if his mother ever told him that it is impolite to spit. Upgrade fires a baseball right into his mouth, and then he finishes him off with a barrage. All three freaks are down, and Ben decides to head for Zombozo. He reassures that there should be nothing to be afraid of, and then he reverts back to normal form. He is annoyed by the Omnitrix, then he continues into the tent, and a house of mirrors is held within. His reflection scares him, though he chides himself.
Inside, Zombozo taunts Ben as he wanders deeper into the tent. Ben starts seeing things, while Zombozo questions Ben for how he defeated his minions. Zombozo says that he's not quite sure where Ben's aliens came from, yet he knows that Ben is responsible. Ben is then thrown into a nightmare, in which it starts where he falls into a giant spider web. Zombozo as a spider crawls up to him and insists him to laugh, and then he cuts the web to make him fall into the big top ring, where he meets with the real Zombozo. His gems on his coat can be seen clearly with laughing spirits, and the one on his hat shows Gwen imprisoned, only appearing to be withered and covered in flame. Zombozo says that Ben is afraid, and Ben asks what he wants. He decides to show him instead. He reveals his machine from before, and a tube connects to Zombozo. He says that the machine is called the Psyclown, in which he plans to use to drain happiness from everyone he shows his act to. Ben asks Zombozo what he did to Gwen. He jokes that she ran away with the circus, and a spotlight shines upon her. Her appearance seems to look just as withered as her spirit in Zombozo's orb, being barely able to laugh. Ben is angered for what he's done to her, and activates the Omnitrix to turn into Ghostfreak.
Zombozo is surprised, though he seems to be unconcerned. Ghostfreak then starts to beat him up. As he fights, Ghostfreak explains that his fear of clown is nothing compared to the fear of losing his own family. Zombozo seems to be no match for Ghostfreak, at the point where his orb is broken on the Psyclown, and all the sucked happiness within is released. Zombozo climbs out, and he attempts to ward off Ghostfreak, though his voice reveals a fear towards him. Ghostfreak offers Zombozo if he wants to see something really scary. He grabs the skin in front of him and pulls it back, revealing a mass of his insides within him. Whatever it was, it left Zombozo cowering in fear. He begs for mercy, though Ghostfreak responds to scare him off completely. He says, "BOO!" and Zombozo explodes in a puff of smoke and confetti. Ben in return says that he even scares himself.
Ben reverts back to normal, and he goes to check on Gwen. She's tired and has no memory of what happened, only asking where the popcorn is that Ben had gone to get earlier.
In the RV, Grandpa Max congratulates Ben on conquering his fear. Gwen tries to scare him with a clown mask, but it looks like it has no effect on him. After Ben says that it's a good look for her, she just says that he's no fun anymore and walks off. Ben is glad that he's overcome his fear.