The episode opens with Poochi and Ken walking down the street with a bag of groceries. On their way, they encounter a couple with a young daughter whom they have just given a large teddy bear, which she calls "Mr. Tinsel". Ken simply sighs sadly at this sight and continues to the lab, where the girls and his father are decorating.
Professor Kitazawa (Utonium) thanks his son for getting the groceries. Momoko (Blossom) and Miyako (Bubbles) greet him with a "Happy Holidays". Kaoru (Buttercup) states that he was just in time to help with the decorations, but Ken declines, because he doesn't believe in Santa Claus. The girls surround him asking him questions in disbelief at his statement. Ken states that he is 89.6% sure that Santa doesn't exist, inquiring if the girls have ever seen Santa with their own eyes. Miayko states that he puts presents in their stockings, and Kaoru and Momoyko state that they always tried staying up on Christmas Eve but always wound up falling asleep before Santa came down the chimney. Ken apologizes, but says that until he sees Santa with his own eyes, he just can't believe in him. The girls inquire about his presents, but Kaoru says that doesn't that prove Santa exists. When Momoko asks Ken what he got last year, he replies that he didn't get anything; he states that he sent a letter every year but never gets it, so he didn't bother this year. He tells them to continue decorating without him. Kaoru asks him to wait, while Momoko states that it wasn't the Santa she knew. Ken leaves and puts away the groceries, then notices something laying on the couch. He remembers when he was younger and his mother said that Santa brought him something special for Christmas to which his dad had agreed.
Miyako says that she wouldn't know what to do if Santa stopped coming down the chimney at her house and that it doesn't make any sense. Momoko asks if the Laboratory even has a chimney and suggests that maybe that might be the problem. Kaoru says that wouldn't be it, because Santa always finds a way, and Professor Kitazawa says that Kaoru is right. Miyako asks why Santa stopped bringing presents, and Kitazawa replies that there are some requests that even Santa can't do, and that he wishes that Ken would understand that. Momoko says that maybe it was a problem with the mail and Kitazawa replies that it wasn't. She then states that Santa could do anything, since she's now a superhero like she wished to be last year.
Ken returns to the lab and comments that the girls must have gone home for the night. Kitazawa says they did, but they would be back tomorrow for the Christmas party. Ken replies that he doesn't think he's in the mood to party. When Kitazawa inquires what's wrong, Ken states nothing and that having their friends over would be better than just the two of them.
Momoko asks her sister, Kasey, what she got her for Christmas. When Kasey replies socks, Momoko states that she told Kasey that she wanted a Galactic Man action figure. Kasey replies that she may have forgotten and that she had to wait until Christmas day to find out. Momoko states that she doesn't care what Kasey got and that she might have gotten Kasey nothing, and then Momoko has a flashback of Ken from earlier.
Miyako is offered some peppermint tea by her grandmother and gladly accepts. Her grandmother inquires as to what she wished for that year and Miyako replies that it's a secret. Miyako also has a flashback of Ken from earlier that day.
Kauro's dad reminds her to send her letter to Santa. She responds that she was going to write it that minute. She then asks her dad if he could take off his wrestling mask at home, and consider it an early Christmas present. Her dad replies "Not a chance." Kaoru writes her letter in her room, thanking Santa for the skates she got last year. She had used them all the time until her brothers threw them on the roof and that he might make a note of that. Then she gets a flashback of Ken, like the others, from earlier that day. Her belt then beeps a signal from Momoko. She hears a knock at her window, and when she opens it the other two are outside it, transformed. She inquires if it was about Ken, and both reply affirmatively.
They go back to the lab, to Ken's surprise. Momoko states that they came back to cheer him up. Kaoru then adds that Christmas is like sports - it works best when everyone on the team is having fun. Ken thanks them but he says that they won't be able to change his mind. He states he knows that he won't get what he really wants for Christmas. Momoko asks what about his calculations and that there was a 10.4% chance that Santa exists. Ken responds "maybe" but that it was too late, it wouldn't get to the North Pole in time. Momoko tells him not to worry, because the Postal Service has a last minute delivery service. Kaoru pipes up and says that they can send theirs at the same time, because she almost forgot to write it. Ken agrees but says that he isn't going to get his hopes up. The girls watch a video (of them) while Ken writes his letter. He hands them his letter and asks them not to read it themselves. Then they take off.
At the North Pole, the reindeer are preparing for Christmas. Someone asks Santa if he got the last-minute letters yet to which he replies "yes". Dasher says that's good because he and the other reindeer were getting worried. Santa replies that there was no need to be concerned. He states that his last letter was from "that Powerpuff Girl, the green one." Kaoru had added a PS that if he couldn't find the skates that was fine but could he help Ken. Kaoru had added that if he could get both of the presents that would be best. Santa simply sighs at that. Santa then reads Ken's letter, and states that he remembers Ken, and that he was a difficult case and perhaps "This year I could make his wish come true."
Mojo Jojo is standing with a "photo with Santa" sign, calling at passerbys to get their picture taken with "Santa" to help Santa take over the world. He inquires as to why no one wants to take their picture with him, stating he thought it would be a good way to build a new robot. He voices that maybe he was wrong before a little girl exclaims that "It's Santa." Mojo asks if she wants a picture with him and then he sneezes and his beard falls off, causing the girl to cry. After being scolded by the girl's parents, Mojo vows to destroy Santa so that people would have no choice but to like him.
- The Powerpuff Girls: 'Twas the Fight Before Christmas (the Christmas episode of the original Powerpuff Girls series)