The Carlson's move into their new dream home but little do they realise there are monsters living in the basement. How long can Eddie hide Fiend, Haggis and Norman from the rest of the family?
Eddie is panicking about the arrival of his school report, and tries to stop the post with the help of the monsters. But they are too busy being educated by Kate and Nick, who are desperate to prove who is the brainier parent.
When Eddie teaches the monsters about lying, little does he realise what he's unleashed. What starts out as a fib soon escalates into a series of huge whoppers and Eddie has to play along with all of them for fear of being found out.
When Eddie teaches Haggis to be more assertive, things soon gets out of hand as the furry giant starts to throw his weight. Meanwhile Fiend is reduced to a gibbering wreck, now that Haggis has taken his role as the bossy monster.
Eddie and the monsters keep reading Angela's diary - obsessed with her day-to-day life. But when Angela finds out, she gets her revenge by writing entries she knows will freak the monsters out.
When the monsters scare off a cleaner, Kate reaches breaking point; either they clean up their own mess or get out. Eddie is desperate to tidy the house before she gets back but the monsters have other ideas.
When Angela is asked to babysit, the monsters ask Nick how babies are made. As usual, they get the wrong end of the stick and Haggis ends up thinking he's pregnant.