Luke Smith is struggling to adjust to life without Maria Jackson, she having moved to Washington, D.C. with her father. Meanwhile, the Chandras move into the Jacksons' old house on Bannerman Road and Sarah Jane Smith starts an investigation into disappearing children in the area. Sarah Jane makes Luke and Clyde promise her that they will not reveal her alien investigating secrets to the newcomers to Bannerman Road.
Clyde Langer and Luke meet new girl Rani Chandra at school. After Clyde sees a clown in school prior to the sudden disappearance of one of his friends, Rani reveals she is being stalked by a clown that no one else can see. With Clyde having got into trouble with the new Headteacher, Rani's father, Luke arranges to keep an eye on Rani in his place and goes round to her house to help her unpack. Sarah Jane and Clyde link the disappearances of the children to the Museum of the Circus, Clyde and two of the missing children having received tickets for it. Rani, who wants to become a journalist, begins her own investigation and makes the same connection to the Museum having found a ticket in a school book belonging to one of the missing children and having a ticket herself.
Sarah Jane and Clyde explore the Museum of the Circus and encounter Elijah Spellman. Soon they are joined by Rani and Luke and Spellman sets his robotic clowns on the group. Sarah Jane halts the clowns, as shown in the picture, with her sonic lipstick and Luke theorises that Spellman is an alien. As Sarah Jane, Luke, Clyde and Rani attempt to escape the building, Spellman reveals himself to have been the legendary Pied Piper of Hamelin and now Odd Bob the Clown seeking to feed off their fear.
Sarah Jane and the rest escape through the back door. Then Sarah Jane tells Luke about why she's scared of clowns saying that the clown mannequin in her room came to life when she was young. The next morning, Rani looks out of her bedroom window and sees Odd Bob's balloon in her garden. When she gets to the school she tells Luke and Clyde, then a load of balloons fall down from the sky, all the school children pick them up (apart from Luke, Clyde and Rani) and fall under the spell from Odd Bob, behaving much like the Pied Piper story. But Clyde uses his phone to interfere with Odd Bob's control and the children are released. Then Odd Bob suddenley kidnapps Luke and Sarah Jane must face her fears to save Luke. Then Clyde uses his funny jokes to make Odd Bob scared. He then gets trapped in a box where nothing can get out not even thoughts. In the end Clyde says how the universe is always full of surprises.