The first book begins with an introduction to Gregory "Greg" Heffley and his middle school life. It takes place during his first year of middle school. The book also explains the "Cheese Touch" early on. It is just like cooties but more intense. In the book, a kid named Darren Walsh touches the cheese with his finger. It is passed around the school, and later gets to Abe Hall, who moved to California still holding the Cheese Touch.
In the first half of the book, Rowley and Greg endure events such as Halloween, learning how to wrestle, and acting in the play of The Wizard of Oz as a tree. During trick-or-treating on Halloween night, Greg and Rowley are ambushed by a group of teenagers. They take refuge at Greg's grandmother's house and taunt the teenagers from there by making sounds and faces at them. This upsets Greg's mom, who orders them to come home. They do come home, but get a surprise when they come to the driveway—Greg's father drenches the two friends with a trash can full of water.
On Christmas day, Greg writes that he gets very few presents that he likes. He does not get the one thing he really wants, a video game called Twisted Wizard, but instead gets a red sweater because his parents mix the presents up, an 8 x 10 picture of his uncle, and a Big Wheel. Manny gets all the presents that he wanted, making Greg more frustrated. Greg then throws a football at Rowley while the latter is riding the Big Wheel, breaking his hand. At school, Rowley is surrounded by girls because he is injured, which makes Greg mad because he wants more attention from girls.
Greg and Rowley join safety patrol, and had to walk the morning kindergartners home. When Rowley isn't there, Greg chases the kindergartners with a worm. He is wearing Rowley's hat, and Rowley gets accused of doing the whole thing. When Greg confesses to Rowley, Rowley tattles on him and gets promoted in safety patrol. Rowley and Greg get mad at each other. Slowly, they begin drifting apart and Rowley starts hanging out with Collin Lee; when he goes near Rowley's front yard, walkway, or house. Greg retaliates by spending his night at Fregley's. The sleepover turns into a disaster as Fregley becomes hyper by eating too many jelly beans and begins to chase Greg with a booger. Greg then leaves and runs home in the middle of the night.
Nearing the end of the school year, Rowley's comic strip, called "Zoo-Wee Mama", is entered into the school's newspaper. Greg tells Rowley to list him as the co-creator because it was his idea and joke punchline. Rowley then denies that Greg had anything to do with it. They get ready to fight but are then interrupted by the teenagers they taunted on Halloween. They showed up to pay them back and they force Rowley to eat the cheese at the blacktop, but Greg gets away by lying to the angry, bad tempered teenagers saying he is allergic to dairy products. The next day, Greg explains that he removed the Cheese, but unfortunately for him, the other students thought that this meant Greg actually touched it, giving him the Cheese Touch. For the rest of the year, Greg is in seclusion from everyone else and he and Rowley become best friends again. Despite Greg's best efforts to become "class clown" in the favorites page in the yearbook, the title is given to Rowley for his "Zoo-Wee Mama" comics. Greg states at the end of the book that he threw away his yearbook and doesn't care about Rowley having the title of Class Clown, but if it goes to Rowley's head, Greg will remind him that he was the one who ate the cheese and won't mind telling the entire school about it.