Louie's family has recently moved to a new neighborhood. Lonely and feeling friendless ("New Kid in the Neighborhood"), Louie goes back to his room to play with his favorite toy, Red, his little red plane. When Red "suggests" they take a trip back to his old neighborhood, Louie makes a diorama out of an old shoebox covered with purple cellophane. He looks into it and, in his imagination, they are off ("Big Red Plane")!

As they fly towards the old neighborhood, strange doings are afoot. A gang of odd-shaped creatures — a mouse, a monster, a sack, a broom and a flower — are plotting to trick Louie when he arrives ("A Welcome for Louie").

Louie lands in his old neighborhood, but something is amiss. It's dark and empty. Louie calls out for his old friends, but the only answer is the echo of his voice. Suddenly, a whistle shrieks. Dark shapes jump out and chase Louie through the streets and alleys ("Shadows"). Louie is trapped! The gang of creatures drag him to their hideout, where they give him the third degree. Just when it looks really bad for our hero, he notices, peeking out from the bottom of the "Sack," the tail of the neighborhood cat. These aren't frightening creatures at all. These are Louie's old friends, dressed up for Halloween! After the trick is revealed, they all set out to celebrate Captain Louie's return ("Trick or Treat").

Louie and the gang are approached by Julio, a new kid in the neighborhood. They are all about to set off for some trick-or-treating when one of the gang, Ziggy, mentions that someone has moved into Louie's old place. Indignant that anyone would dare to try to take Louie's place, they declare this new kid a Looza and, led by Julio, they head off to "trick his house up good" ("Looza on the Block"). They are just about to launch their attack when they are surprised by Julio's mother exclaiming, "What is going on out there?" The gang stops dead in their tracks. Julio is the new kid, but he didn't want to admit it to his new friends!

Next, the gang decides to go to Ziggy's house. They have never been there before because he lives in a scary neighborhood. Ziggy seems oddly resistant to the idea, but the gang insists. Ziggy is forced to admit that he didn't want his friends to go to his place because his family can't afford Halloween decorations and candy. Louie gets an idea, and the gang heads off ("Spiffin' up Ziggy's").

It's getting late, and Julio says he has to get home. Louie suggests that they could hurry things up if they finish their trick-or-treating by plane. He and Red could take them all ("Captain Louie")!

When they land, it is time for Louie to go. He bids his friends a warm farewell ("Home Again") and finds himself transported out of his diorama world and back into his new home. Louie hears his mother telling him to put on his costume and join the other kids, but he's just not sure. Then he remembers his old gang and how Julio fit right in... and how he helped out Ziggy. Louie gathers up his courage and heads outside where, dressed as "Captain Louie" in his red plane, he makes new friends as the Halloween hit of his new neighborhood ("Finale").