This episode opens with Jimmy, Freddie, Pufnstuf,Cling, and Clang all having a picnic. Freddie is playing a magical tune and all are enjoying the great outdoors of Living Island when suddenly Witchiepoo appears in the sky on her Vroom Broom. Scared that they will be zapped by Witchiepoo, they run and hide in the forest. Pufnstuf warns them not to touch the evil mushrooms, because one touch from them and you will turn into an evil mushroom. Jimmy and Freddie get caught by the evil trees but escape only to fall into the mushroom patch. Freddie gets touched and turned into a mushroom. Jimmy grabs Freddie and runs back to the cave to tell Pufnstuf.
They take Freddie to Dr. Blinky. Dr. Blinky has some anti-mushroom powder but it doesn't work and Freddie remains a mushroom. They discover that Witchiepoo has a book of spellswhich contains an anti-mushroom spell. Jimmy and Candle devise a plan to get into the castle and steal the spell.
Jimmy disguises himself as a "beggar", he meets Seymour and Orson at the gate and they trick Jimmy into giving them the Candle. When they take the candle, Jimmy runs back to Pufnstuf. With Candle now in the castle, he is able to spy on Witchiepoo and find the magic spell. Witchiepoo finds out Candle is a spy; luckily, Pufnstuf and Jimmy arrive just in time to save Candle, steal the spell, and escape from the castle.
Back at Dr. Blinky's, Jimmy runs in with the magic spell; Dr. Blinky quickly makes the potion and drops Freddie into it. There is a bang and puff of smoke, and Freddie is back to normal. Pufnstuf proclaims the dayto beDr. Blinky Day.