The episode opens on a sunny day at Spoonerville's 10th Annual Water Carnival. An announcement plays for a bathtub race scheduled for the next day, sponsored by Honest Pete's Used Cars.
P.J. asks his father if he can be on his racing team, but Pete tells him he isn't ready yet. He then challenges anyone to race against him. While Goofy is signing up, he tells P.J. that he can be on their team. P.J. isn't very excited though because the Goofs have lost the last 10 years in a row. Goofy claims this year he has a secret to winning the race.
Goofy attaches a rope to the back of his car and the other end to the bathtub in their second-floor bathroom. He pulls the tub out and through the house, onto the front with Max and P.J. riding in it. Goofy then sets up a giant tent over the whole house so they can work on some improvements to the tub without Pete spying on them.
Pete bellows for his son and reveals to him a newly bought "racing tub". He lets P.J. get in the tub and asks him to join his team now instead, telling him he's finally ready. When P.J. is about to leave to go tell the Goofs about his decision, Pete gives him an official team hat, equipped with a hidden camera unbeknownst to P.J..
In Goofy's yard, P.J. tries to explain himself, but Goofy talks over him before he can. Goofy has a slide projector set up, and explains that Mother Nature is the reason they lose every year. He's attached a paddle wheel and a propeller to his bathtub to overcome the mud and holes on the track. Before P.J. returns to his house, Max reminds him that he swore not to leak any of their secrets.
Pete takes P.J. to help him booby trap the race course, under the guise of making the course safer. First they set up a tarp and trip rope across the track. Then in Pete's boat, they drop what Pete claims to be alligator traps in the water. P.J. wonders if Goofy's tub will hit one of the traps, but Pete lies to him by telling him the race course is on the opposite side of the lake. Lastly, P.J. balances a boulder on the edge of a cliff above the track, while Pete tells him the winner's faces will be carved into it.
Later that night, P.J. hears Max's voice. He sneaks downstairs to investigate and catches his father watching recorded clips of Goofy's bathtub racing secrets. P.J. then finds the camera in his hat and discovers that he recorded the footage himself. He storms in the room and accuses Pete of dishonest cheating, telling him he will tell Max and Goofy about the booby traps. He doesn't want to win if it means cheating his friend. Pete claims that he's just "honest cheating" and tries to guilt and confuse P.J., before abruptly putting him to bed.
The next day at the starting line, Pete shakes Goofy's hand and gives him a map of the course. P.J. tries to tell Max about the traps but isn't able to before the tub race starts. So he takes a shortcut on his bike and runs into the tarp trap in order to allow Goofy's bathtub to safely pass. P.J. then rides to the bottom of lake and cuts the traps loose from Goofy's tub as it paddles through the water. When Max peeks into the water, he notices P.J. and thinks it's a sea monster with his friend's face. As they arrive at the last part of the race, Max finds ropes and P.J.'s knife on the back of their tub. He concludes that his friend sabotaged them and told Pete their plans.
Pete pulls the rope connected to the boulder and P.J. tries to stop it, but it knocks down onto the road. Goofy's bathtub is stopped and P.J. slides down the hill. Here Max confronts P.J. and tells him their friendship is over. Goofy and Max continues the race, but get stuck in a big hole dug by Pete. When the propeller doesn't give them enough lift, Goofy blows a giant bubblegum bubble enough to lift them out of the hole and towards the finish line.
P.J. realizes he can help the Goofs win and attempts to distract his father. When Pete stops his tub to get out and fix P.J.'s tie, Goofy's tub flies in from above and passes them. It's a photo finish as they both rush to the finish line, and Honest Pete is the winner. But when the mayor notices a flame coming out of Pete's tub, Pete tries to avoid the subject by begrudgingly giving his grand race prize to Goofy.
P.J. gives his dad the hat back, revealing the hidden camera to everyone. Max apologizes to P.J. for everything, and then asks if it was really Pete cheating the whole time. The episode ends as P.J. gives Max a philosophical talk about right and wrong.
- Jim Cummings: Pete
- Brian Cummings: Mayor Baba
- Bill Farmer: Goofy
- Dana Hill: Max
- Rob Paulsen: P.J., Water Carnival announcer voice, man with cowboy hat
- The title is a reference to a line from Shakespeare's Hamlet: "To be or not to be: that is the question."
- This is one of four episodes that contradict with the Goof Troop timeline.