When nine-year-old Ned Flemkin feeds his pet newt a can of Zippo, he ends up turning into a 6-foot shapeshifting pal for life.
Ned goes to the pet store, hoping to buy an elephant, but all he can afford is a listless newt he called "Newton" who does nothing but sit in a fishbowl. The pet store owner sells him a can of Zippo For Newt, which turns Newton into a 6-foot transforming anthropomorphic newt. Ned and his new pal, Newton, trash the house by playing Tag.
Ned has a crush on the girl across the street, Linda Bliss, but can't talk to her. Newton tries to get her attention by throwing a tiny pebble against Linda's bedroom window while she's asleep, but ends up throwing a boulder, and destroys the window. Ned and Newton desperately try to replace it before Linda wakes up the next morning.
Ned's class are making small floats for the annual Friendly Day Parade, and Newton wants to help. He ends up making an enormous, barge-sized float for Ned and ruins the parade when the float causes massive property damage and sinks in the lake.
Ned's tattletale cousin Renfrew comes to visit. He destroys most of Ned's toys and repeatedly tells on Ned. Newton decides to drive Renfrew away by causing a series of ridiculous situations, which causes Renfrew to have a nervous breakdown as he tattles to Ned's parents about them.
Ned's father gives Ned a vintage "Captain Ocelot" action figure after his son takes an interest in the show. Ned's mother, however, throws it out, and Ned and Newton have to go to the Friendly Falls Dump to find it again. Afterward, they find out that the dump owner is actually the retired actor who played Captain Ocelot.
Ned's mother wants a 35 carat "Goldina" ring for her birthday, but Newton just insists it's a "cheap replica" of a sacrifice ring used by a group of Peruvian savages called the "Jajamojos". Ned and Newton go to Peru to get the ring, and brave the dangers of a temple full of booby traps, and escape being thrown in a volcano.
Ned is sent to the grocery store to get a can of tomato paste, but Newton instead suggests they go to Mars, thinking that it's made of tomato paste similar to the idea that the Moon is made of green cheese. They go to Mars, and it is made of tomato paste! But they find that the tomato paste there tastes awful, so they decide to just get it from the grocery store after all.
Ned wants to impress Linda at the school dance, but the town showoff, Rusty McCabe, also wants to impress Linda, and challenges Ned to a dance contest. Ned is completely unable to dance, but he hopes that Newton will be able to tutor him. When this doesn't work, Newton gets the idea to put Ned in a large costume, where he stands on his shoulders while Newton dances.
Ned starts a paper route to save up money for a bike, but Newton has more ambitious plans for him. He turns Ned's paper route into a media empire, making him extremely wealthy, but depressed because he doesn't even have time to ride his new bike.
Ned and Linda go on a date to the circus, after Newton accidentally sells Ned's parents' car to raise the $5 ticket price. The circus turns out to be a scam with the circus acts being subpar. However, to prevent the date from being a failure, Newton saves the circus by performing a series of astounding circus acts but also ends up causing the circus animals to stampede through town.
After a fun weekend, Ned says he can't wait for the next one. This gives Newton the idea to build a time machine out of household items so that they can go back to Friday and do the weekend over again. They can't control the machine, however, and it ends up taking them to the Jurassic period, where Ned accidentally stomps on a fly and changes history, causing newts to be the dominant life form on Earth instead of humans. They go back and fix this change, but still have trouble controlling the time machine to take them home, causing them to end up at Gilligan's Island. However, it turns out to be a dream, but the trip to Gilligan's Island was proven to be real.
Ned attends Boy Scout camp, and Newton notices that the other scouts have more merit badges than Ned. Ned doesn't care, as he's allergic to the outdoors and doesn't enjoy being a Boy Scout, but not wanting to see his owner disgraced, he motivates Ned to earn as many merit badges as he can. Eventually, when Ned becomes the most decorated Boy Scout, Newton decides to wrap the entire forest in anti-allergenic plastic, but when he does, Ned finds out that he wasn't allergic to anything in the forest, but to his mother's macadamia-nut cookies that she always packs him.
The company that manufactures Zippo Newt Food has changed the formula, which leaves Newton unable to control his morphing ability. Ned and Newton go to the corporate headquarters to complain, but the president of the company refuses to go back to the old formula until Newton demonstrates that the "new formula" causes newts to grow six feet tall and change into different forms.
In another attempt to get closer to Linda, Ned plans to audition for a school production of "Little Red Riding Hood". Newton, eager to help out, wants to be cast as the Big Bad Wolf. Unfortunately, the new school drama teacher is an ex-Hollywood executive who makes Ned and Newton repeatedly change the play until it's a post-apocalyptic science fiction story called "Mad Max and the Chicken-Wolf", where Linda isn't even in it.
Ned has been watching too many monster movies, and when he's left in the house alone, he's paranoid that there are monsters around the house. This isn't helped when his parents ask Uncle Frank and several friends of his to check on him, and they're all dressed as monsters, on his way to a costume party. Newton, after thinking about what killed all the monsters in the movies, decides to let the monsters fall to their death by jacking up the house and pushing them out the door.
Ned's father opened a new bank account for Ned, after finding all the change around Ned's room. To Ned's horror, however, that means he has deposited his "lucky penny", a treasured penny that has an image of Gene Hackman as Lex Luthor on it. When the bank refuses to get it for him, Newton helps Ned by breaking into the bank vault to find it. They do, but Newton had to give away $3.5 million in the bank vault to make it easier to find. They're saved, however, when a passing coin collector points out that Ned's penny is only one of two in the entire world, worth $3.5 million. Ned and Newton quickly put all the money back in the vault, and the bank owner gives Ned the only other Gene Hackman penny in existence.
After watching too much television, Newton gets the idea to improve Ned's life with all the things featured in the various commercials he's watched.
Ned's family is on a long, boring car trip, with only a "Vehicle Bingo" game to pass the time. Ned's parents accidentally leave him at a rest stop, however, and Ned needs Newton's help to catch up to them. After being blasted off to Russia, they end up traveling around the world and take every mode of transportation on the Bingo card trying to get back, which perplexes Ned's parents.
Local hero Gus Gingrich has held the world's record for "Most Pants Worn at Once" since 1959, until a man in Germany breaks his record, leaving the town heartbroken. Ned and Newton decide to restore the town's spirit by trying to break a record, but Ned fails at each record he tries. Because of this, however, Ned breaks the world record for "Failing at a World Record" (according to Newton) and restores the town's spirit.
Ned is on a dull field trip at the Friendly Falls Museum of Dusty Old Things, and has to fill out a worksheet of questions about the historical exhibits in the museum. Newton wants to help, but many of the answers he gives are wrong and absurd, such as how Archimedes discovered the bathrobe, and how the Great Wall of China was a backyard fence built by one laborer who couldn't build corners. Ned finds out too late that all the answers are wrong, but Rusty McCabe forces him to trade his worksheet with him, assuming that Ned's answers will be better.
Rusty McCabe has built a secret clubhouse that he won't let Ned in, so in response, he makes his own secret club in a tree fort. Newton wants to help, though, so they end up building an enormous, five-star clubhouse in the tree, and it becomes the most popular club in town. Rusty begs to be let in, but when Ned lets him in, he accidentally causes the clubhouse to collapse.
Ned's friend Doogle has a pet dog, an obese, listless dog named Lummox. Doogle, when overhearing his parents talking about fleas on Lummox's fur, thinks his parents are going to get rid of him, and feeling sympathy for the fellow pet, Newton tries to prove Lummox's worth by setting up a series of situations where Lummox does incredibly useful things for Doogle's family.
Newton has been acting stranger than usual, and when Ned takes him to see the veterinarian, Newton professes that he has fallen in love with her. As the day goes on, however, he keeps falling in love with dozens of other things, such as a passing roller skater, many different zoo animals, and mostly an ice cube tray. Ned eventually finds out that he's only acting this way because he's shedding his skin.
Ned has been entered into a track and field day at school, but he's not happy about it, since Rusty McCabe always wins every event. He wins so often, he's even gotten his own theme music, with Yo-Yo Ma as a guest cellist. Newton thinks Ned into every single event at the track day, including team sports. Although by the end, Rusty has won everything and Ned is exhausted, he's given a special award for being the first person to participate in every single event.
Ned's parents have the flu, and want Ned to do the day's chores. Newton tries to help, to get them done faster, but he ends up being incredibly destructive.
The local mall is holding a contest where the first person to guess how many jellybeans are in a jar will win a drivable toy car. Ned wants the car, but when Newton comes out, he wreaks havoc around the mall and causes him and Ned to be locked inside after it closes. The sadistic mall security guard wants to ban them from the mall, but they're able to blackmail him when they find out that he's been counting the jellybeans in the jar, one by one, to win the toy car. To keep them quiet, the mall cop gives them the car.
