One day Pepito, son of the Spanish ambassador who lives next door to Madeline, invites her and her cohorts to a Gypsy carnival. They venture forth excitedly, but suddenly a storm hits the fairgrounds, so everyone hops in a taxi and heads back home. Except for Madeline and Pepito, that is--forgotten and stuck at the top of a Ferris wheel in a downpour. Pepito climbs down to get help, and the Gypsy Mama takes the children under her wing ... and on the road. Gypsy life affords many previously forbidden wonders to the two kids--they get to float in a pool while everyone else is in school, and they don't have to brush their teeth, or even sleep. In between learning how to walk the tightrope and juggling, they send Miss Clavel a postcard. "'Thank heaven,' she said, 'The children are well! / But dear, oh dear, they've forgotten how to spell.'" As she and Madeline's 11 classmates race to find them (based on the postmark location), the Gypsy Mama sees the approaching Parisian posse in her crystal ball. Despite the Gypsy Mama's worst intentions, and the fact that she sewed the children into an old lion's costume to hide them, Madeline and Pepito are reunited with Miss Clavel and the others.