School's Out!: The Musical is the twenty-eighth and final episode of Season 4. It’s also the third television movie and the first and only musical. Although it was not aired until the summer of 2005, this movie is still considered part of Season 4. It features eleven different musical numbers. Chelsea Moon, Dusty Moon, Savannah Moon and Guy Moon makes additional background singers.
It’s the first day of summer, and Timmy and his friends are counting down to the end of school. Cosmo, Wanda and all the other fairies are excited, to, for summer allows them to spend all day granting wishes for their godkids. The only ones not celebrating are the adults, who are frustrated with the havoc the kids wreak when school’s out. Enter Flappy Bob, owner of the Learnatorium, an all-summer-long educational camp for kids. The parents don’t waste a moment, signing all of the kids up for a summer of learning and rules. But unbeknownst to Bob, he is part of the Pixies’ master plan to take over Fairy World!
In the late 1960’s, after being abandoned by his clown parents thinking him to be in danger (especially his father didn't finish Law School, he dropped out), Flappy Bob is found on the side of the road in Kansas by Head Pixie and Sanderson who decide to use him as a pawn in a 37 year plan.
37 years later, Timmy and his friends are released for summer vacation and begin causing havoc for Dimmsdale thanks to the Fairies intensifying the children's fun (Kids Just Being Kids). Looking for an answer, the parents are introduced to Flappy Bob who recommends the kids be put in his Learnatorium before they get hurt and cause the parents any more harm (Get Flappy). AJ, Chester and Francis are dropped off at the Learnatorium.
The car of the Turner family pulls up in the Learnatorium driveway. Timmy's father takes Francis, who’s too large to fit down a "child drop-off" chute, and throws him out of the way so he can drop Timmy in. Timmy's parents are relieved as they can now do whatever they want.
With all the kids trapped in the Learnatorium with nothing to do, H.P. and Sanderson ping to Timmy and convince him that the root of all his current problems his adults. With coaxing from the Pixies, Timmy wishes that kids were in charge (Adults Ruin Everything /Da Pixie Rap). As the President of the new Kid World, Timmy has Chester destroy the Learnatorium (Ten and in Charge). With kids in charge and getting everything they want, Jorgen Von Strangle is forced to return the fairies to Fairy World since according to Da Rules, they’re no longer needed (Pull Back the Fairies).
With the fairies off of Earth, the Pixies have control of the magic. Timmy tries to assure himself that everything will be fine until Flappy kicks down his door. Flappy is angry that Timmy got kids to rule the Earth and destroy the Learnatorium, but Timmy states the reason why they tore it down was because it was boring. Flappy states that place was fun to him, but Timmy states that place was lame. Flappy refuses to believe that because he was taught boring and dull were fun. Timmy questions Flappy who taught him that when suddenly the Pixies appear. The Pixies reveal that they've been raising Flappy over the years to think dull and boring were fun so that the Learnatorium would be built all for his apparent dream which they claimed Timmy destroyed. Acting as Flappy's Godparents, they offer Flappy the power to make the world in his vision which he accepts despite Timmy's heartfelt plea to consider how his clown parents would feel about this (Where Is the Fun?). Granting the wish, the Pixies gain control of both Earth and Fairy World which are built in the image of Flappy and the Pixies respectively. Cosmo and Wanda are put in Fairy Jail by Jorgen, but escape by distracting him with a love song (Floating With You). With Pixie magic flooding Fairy World, Cosmo steals Binky's wand and sends Wanda down the rainbow bridge connecting Fairy World to Earth before it’s dissolved.
Now that the Pixies have taken over Fairy World, and Flappy Bob has made the world safe, the only people who are having fun are adults and the Pixies (Unfundamentals). Flappy soon starts questioning if what he is doing is what he really wants. While he’s thinking, Happy Peppy Gary and Betty appear to cheer him up, but just as they start their song, Flappy yells at them "Not now!" before he uses a button to send them down a trapdoor. Later, Flappy is about to throw his clown-related items into an incinerator when he overhears H.P. and Sanderson talking to each other. H.P. and Sanderson gloat that they defeated the Fairies and took over both Fairy World and Earth all by stripping Flappy of his dream and changing his perception on the idea of fun. Sanderson and H.P. note to each other that only a clown would fall for that. Flappy realizes that Timmy was telling the truth about the Pixies all along. He decides to embrace his clown background and get everything back to normal.
Wanda, at this point finds Timmy, and they quickly get somewhere safe away from the guards. Timmy tries to get everything back to normal but with the Pixies in control of magic, there’s no way to break the contract. Timmy and Wanda are afraid all is lost, but Flappy Bob appears, returned to his old self, and states there is still hope. The Pixies raised him to be a boring businessman, but because of that he was able to find a loophole in the contract. After showing it to Timmy, Timmy realizes this is just what they need to fix everything. Timmy and Flappy set the kids free from the unfun stuff and recruit them in making the Earth as fun as possible while also holding down the adults and Pixie Guards that are trying to stop them from making the Earth fun. The Pixies soon get word from this and go down to Earth (The Reprise Remix).
When H.P. and Sanderson appear, Flappy is angry that the pixies lied to him and tried to prevent him from becoming the fun clown he’s supposed to be. H.P. and Sanderson admit this, but the latter reminds Flappy they still have the contract Flappy signed. Flappy admits that everything in the contract is binding, but that is why he wants to turn the Pixies' attention to some fine print he found on the contract he signed. The fine print states the world will reflect fun "as defined by Flappy Bob". Flappy then states his new definition of fun is everything the way it's supposed to be which means the Pixies are forced to declare defeat. Timmy notes to the Pixies they shouldn't have sent Flappy to law school if their plan was going to work. An angry H.P. states to Timmy he may have thwarted their plans this time, but the next 37 year plan they make won't fail. He then states Timmy will pay when he’s 47. H.P. then rips up the contract and uses his phone to turn everything on Earth and Fairy World back to normal.
Once Dimmsdale is returned to normal, Wanda brings Flappy his parents who have been searching for him for 37 years (which Wanda was able to do due to a loophole) and reunites with Cosmo. Everything SEEMS normal until both Happy Peppy Gary and Betty open a new Learnatorium. Timmy requests his fairies for fun time, so Cosmo & Wanda use their magic to turn everything at the Learnatorium fun and puts on a concert (Kids Just Being Kids (Reprise)). The kids' parents finally see how much fun the kids are really having and decide to join in the concert. It’s revealed during the concert that the Fairies have made the Pixies return to Kansas as punishment for trying to take over Fairy World and Earth. After the concert, H.P. notes they should make a 6 week plan next time as the episode ends.