Malcolm realizes the entire neighborhood has been throwing a block party when the family leaves town for an annual vacation; Hal and Lois participate in a kielbasa-eating contest; neighborhood kids pay money for a chance at beating up Reese; and Otto acquires a device for "extracting seed" from a bull.
When Malcolm becomes editor of the high school literary magazine, the principal instructs him to censor a well-written story; Lois encourages Hal to flirt with a new supervisor so he can keep his job; Francis teaches Otto how to waltz; and Reese pulls a prank on Dewey.
Grandma Ida makes another conjugal visit at the Wilkerson house. This time she isn't alone as she walks in with her beau, Mr.Li a wealthy, widowed Chinese man whom she met at a cruise. Hal and the boys see this as an opportunity to get Ida off their backs once and for all. But Lois thinks that her mother is up to no good as usual. Meanwhile, Malcolm has just got his tongue pierced, but it gets infected right away so he can't say any words that involves an "s" in them. On the day of his grandmother's wedding, he confirms his mother's suspicions when he finds ...
Malcolm volunteers for the company's softball team, only to realize that Lois is the coach; Francis sets out to prove he's not lazy; and Hal interviews for a job at a company that might be recruiting secret agents.
Lois' younger sister, Susan makes a surprise visit to the Wilkerson house. Immediately, she treats Malcolm, Reese and Dewey like the sons she wishes she had with Hal instead of being single and alone. She also treats Lois as a plague in her life and blames her for being unmarried status. She tells the boys that ever since she caught their mother having sex with their father, she has refused to accept their relationship. However, Susan is plagued with a kidney disease and Lois tries to offer hers for her sister.
Lois has a dispute with Hal and the boys' favorite restaurant; Malcolm clicks with his girlfriend's family... to the point where he forgets about his girlfriend; and Francis gets an assistant who tends to his every whim.
Reese storms out and gets his own apartment. Francis uses the opportunity to blame Lois for all the issues in the family and Malcolm is forced to coach a jock who gets every free break in the world. The new found independence for Reese leads to an unheard of 'A', but, naturally reality comes home to bite with his novel approach to clean clothes.
Lois accompanies Malcolm to his first college visit, where she clashes with a resident advisor; Reese pretends he's a drug user to woo a pretty narcotics officer; Francis and Otto open their own childcare center; and Dewey constructs his own musical instrument.
Reese inadvertently perfects Malcolm and Stevie's science experiment, but can't remember how he did it; Dewey dreams up reasons for people to buy the candy he's selling door-to-door; and Francis aids a piglet.
Lois has just found out that she has a half-sister named Roberta and brings Reese, Jamie and Malcolm with her to meet their aunt and cousins. Her step-mother, Sylvia comments that she looks exactly like Victor and gives her a warm welcome. Despite some nervous moments between them, they're getting along great. Lois thinks it's going to be nice, quality time with them until a furious and vengeful, Ida arrives at the house to spoil everything. She has lost the court case and demands for Victor's pension from his secret family. Meanwhile Hal and Dewey plan to go racing ...
Reese, having deserted the army is trying to find his way home. Lois discovers his fate and goes in search - eventually to the Middle East. After cornering him with the help of some locals he is dragged 'all the way' back home by his ear. Meanwhile Malcolm and Dewey try to honor his probable death by doing something Reese would do.
Lois finally gets Dewey out of the Buseys special needs class. In response to losing their new 'leader' they run away to be with him. Hal, still has no job and picks up a bunch of, dumb but nice, body builders for his latest manic craze.
Lois returns to work at the market as a probationary employee and takes offense at the racist advertising standee for malt liquor. She hopes Malcolm will see her point of view but he is resistant and this leads to a battle of wills between the two. Hal is involved in another battle of wills; this one with the garbage man.
Strapped for cash for the holidays, Hal and Lois decide that all Christmas gifts this year should be handmade. But when Hal sees the thoughtful, quality gifts the boys made, he feels bad about his shoddy attempt and panics.