The Spanish Ambassador and his family move into the house next to the convent. The son, Pepito, proves to be what Madeline calls "a bad hat"; an illmannered, mischievious braggart. One day, Pepito offers a cat to a pack of excited dogs and is hurt in the ensuing chaos. Madeline and Miss Clavel rescue him and Pepito vows to mend his ways. Pepito the angel is bothersome too he frees the animals at the zoo! Madeline helps to put them back and they say farewell to the bad hat.
Madeline falls into the Seine and is rescued by a courageous dog. The girls take home the collarless mutt and name her Genevieve. Lord Cucuface, the President of the Board of Trustees, insists that dogs are not allowed in the convent and his chauffeur takes Genevieve away. Miss Clavel and the girls search the streets of Paris for her but return to the convent disappointed and disheartened. Miss Clavel investigates a noise in the night it's Genevieve! She has found her way home! Later that same night, Genevieve disappears again and is discovered with her twelve newborn puppies. Lord Cucuface takes a liking to one little pup and agrees that Genevieve and her family are welcome to stay.
Miss Clavel puts the girls to bed after a wonderful day at the fair and discovers that Madeline are her friend Pepito were left behind. The Gypsy Mama rescues them from the ferns wheel and makes them a pan of their travelling circus. Madeline and Pepito send a postcard to Miss Clavel and she trails them to the city on the postmark. The Gypsy Mama, afraid to lose the children, dresses them as a lion and they search about for someone to help remove the costume. When they return to the circus tent. Miss Clavel is there! She takes them home, puts the girls to bed, and counts them twice.

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