Bugs Bunny has been hired by Warner Bros. to introduce the audience to Tiny Toon Adventures, which he explains by way of a flashback. The story begins when an animator, after a failed pitch to the network about a TV series starring a rich brat named Montana Max, is ordered to come up with something better by tomorrow morning, or his career will be over. Bugs (who is watching this from a framed picture on the wall) advises the animator to start with rabbits, and he eventually creates a duo of teenage bunnies named Buster and Babs (no relation). After the bunnies surprise him by jumping out of the drawing page and kissing him, the cartoonist throws the bunnies in the trash and leaves.
Buster and Babs decide to make the series themselves. After Buster creates the series location, Acme Acres, they hold an audition for "wacky but lovable neighbors". Following the introductions of Hamton J. Pig, Furrball and Sweetie Pie, and Gogo Dodo, Buster and Babs meet Plucky Duck, who has a large resume of talent, but he becomes exasperated when the bunnies decide to cast him as their sidekick. Afterwards, the bunnies look for villains by opening a box where these antagonists have been kept, all of whom show up in later episodes; Dizzy Devil and Elmyra Duff are introduced at this point. The last one out of the box is Montana Max, the rich brat whom the animator had pitched earlier, and who now seeks revenge for his series being rejected. The bunnies then have Hamton type several episode scripts for them, but Max then shows up to steal the scripts, during which he boots the bunnies out of the cartoon and takes over the show, renaming it The Montana Max Show.
Buster and Babs are unable to fight off against Max's takeover, so Bugs comes in to help. He draws up the schoolhouse Acme Looniversity and, after an introductory song, gives his new students a few tips about being cartoon characters, one of which is "Villains always fall for cheesy disguises." With that in mind, Buster and Babs pay a visit to Monty's mansion, disguised as his personal heroes, Yosemite Sam and Elmer Fudd, and reclaim the episode scripts. Upon realizing he's been tricked, Max turns on the booby traps. However, the bunnies manage to dodge them, and Max gets flattened by his own giant coin that almost crushes the bunnies.
The next morning, the animator returns to find the new show, Tiny Toon Adventures, all planned out for him. He pitches the series to the network, and they love it. After being given a raise for making this new series, the animator offers to give Buster and Babs anything they want. They request a "Created by" credit, which he rejects (although after the beating they give him, he apparently agrees to it, as shown by the episode's gag credit).