McHale and 73 are transferred to the European theater of war. The crew is sent to the southern Italian town of Voltafiore where the Germans are pulling back to regroup their forces. After two German soldiers change the road sign to Voltafiore to point the wrong direction, they drive off and Binghamton and Carpenter arrive. Binghamton changes the sign to point the wrong (right) way so that McHale will go the wrong way. He won't be there to steal the credit when the citizens of Voltafiore present Binghamton with the key to their city.
McHale and the crew drive up and continue on to Voltafiore, where the townspeople are waiting for them. Parker and McHale step up onto the stage to shake hands with the mayor, Mario Lugatto, and McHale tells him that he's half-Italian on his mother's side. Mario welcomes the American liberators on behalf of his citizens, and they all give a Nazi salute until Mario corrects their mistake. They are soon chanting American praises, and McHale suggests that Mario belay the celebration until Binghamton gets there. Binghamton and Carpenter drive up in their shot-up jeep. The commander accuses McHale of changing the road sign so that they were ambushed by the Germans, and Mario insists on giving the ceremonial flowers to Binghamton, calling McHale a fake.
The crew is soon setting up at the Palazzo Muncipale, their new headquarters. Inside, Binghamton is in his skivvies dictating a letter to the citizens, and Mario and his assistant Dino Baroni arrives with Binghamton's clean uniform. The mayor says that it's an honor to repair the clothing of the great and noble American liberator... and then gives him the bill. Binghamton tells Carpenter to pay, and Mario tacks on some extra money for tax. McHale and Parker come in, bumping the door into Mario, and Mario threatens to sue them for whiplash.
Once they're alone, Binghamton complains that the crew has already caused considerable mayhem. McHale asks Binghamton if he can assign them their quarters, and Binghamton says that he's going to live in while the crew lives in the bivouac area in tents. Mario and Dino live outside as Binghamton tells Parker to go pick up the 73 since it's arrived by transport.
Mario and Dino go to the dock and prepare for the 73's arrival. When Parker pulls the boat up to the dock, Mario directs it in but Parker fails to stop and Dino pulls a rope, tumbling the dock. Parker insists that he didn't touch the dock, and Mario says that the U.S. government will pay for the damages. They suggest that they go see Binghamton, but Parker says that the commander is already mad at him and offers to work it out. Mario claims to take offense when Parker tries to speak Italian and goes off with the townspeople. McHale arrives and sees the disaster, and Tinker says that the dock collapsed before they touched it. When Parker says that Mario is going to sue Binghamton, McHale figures that the commander will take it out of their hides. Fuji comes up from below and explains that he missed his buddies and stowed away. McHale figures that a little more trouble won't hurt and leads them off.
Later, McHale arrives at the bivouac area and finds the crew getting their shoes shined by Fuji, posing as a local shoeshine boy. As they try to work out a way to stash Fuji, Binghamton arrives and McHale throws a cloth over Fuji to disguise him as a bench. He says that McHale is in trouble about the dock, and warns that the crew has to come up with 500,000 lire. Meanwhile, Fuji crawls away from where Parker and Tinker sitting on him. Binghamton notices them crouched down sitting on empty air, and Tinker claims that they're doing calisthenics. Parker says that he's doing yoga, and Binghamton pushes him over onto Fuji. He then gives them 24 hours to come up with the money or they'll work it off in prison.
Once Binghamton leaves, the crew wonder how they're going to come up with the money. A German bomber comes in and everyone takes cover in a nearby ruin. They run inside and downstairs, and fine the wine cellar. They find fake Mona Lisas hidden in the wine barrels, and McHale figures that someone is running a phony art racket. The forger's ledger is there, and McHale confirms that he also collected 200,000 from the former German commander. They figure the dock was rigged to collapse.
Someone comes down, and everyone hides. Mario and Dino come down, and Dino says that the 442nd is passing by within the hour and they can palm the fake paintings off on them. McHale and the crew step out to confront Mario, and McHale says that if Mario doesn't stop the claim then he's going to show the ledger to Binghamton. Mario says that his name isn't in the ledger, and knocks over the barrel where Fuji is still hiding. It breaks and Mario figures that he'll get a big reward by telling Binghamton. Once Mario and Dino leave, McHale gets and idea and tells the others what they're going to do.
Late, the crew takes Fuji to the headquarters after he's dressed as a soldier. Mario has already told Binghamton, and they come running out. Mario points out Fuji, but McHale insists that he's an American GI named Irving. Binghamton doesn't believe it, but Fuji speaks in plain American. The commander puts them all under arrest, but a squad from the 442nd arrives. They're all Japanese-American with the 442nd Nisei Combat Team. The sergeant comes over and says that he was born in California and graduated from UCLA. Parker leads the crew in the UCLA fight song, and then offers to call General Mark Clark. Binghamton says that he believes and accuses Mario of leveling false charges, and drags him off. The sergeant offers to take Fuji to his outfit, and takes him off despite McHale's protests.
Later at the bivouac, McHale warns the others that Fuji will get sent to the front lines to get shot at. Fuji comes in and calls them all to attention until they realize who it is. He says that he and the sergeant are second cousins, so the sergeant let him go.