Peggy, a nine-year-old, is in trouble at school because she seems unable to distinguish between her imagination and reality, and blames her difficult behavior on a "Clown," an imaginary playmate. At home, her mother becomes very upset at Peggy's insistence on the reality of the Clown, which the audience sees also. The real emotional meaning of the Clown becomes clear as Peggy slowly realizes that her father is dead...and that the Clown has been a substitute for him in her mind. With this realization, the Clown is no longer needed, and he says good-bye, never to be real to her again.