The episode begins outside City Hall, where all the citizens of Adventure Bay are wearing hats. Because Mayor Goodway has planned a celebration called "Hat-a-Palooza". However, Mayor Goodway is having trouble with her hat because it is too big and floppy. Meanwhile, Alex comes by wearing a brown hat, pulling a wagon with a bunny inside who is wearing a small yellow hat. However, the bunny jumps out of the wagon, causing the other two to become surprised, making Alex let go of the wagon. Because of this, Mayor Goodway in surprise, jumps up onto the wagon, and starts driving all over the place. Then, she bumps into the Grover Goodway statue, startling two crows who were on the statue's hat, and nearly knocking him over. Luckily, she is able to catch the statue, but cannot move, because she is afraid she might drop him. The mayor then orders Alex to call the PAW Patrol, but he gets distracted from the crows from before flying down and snatching the hatband on Mayor Goodway's hat. After that, he searches through her purse, gets out her phone and calls the PAW Patrol.
Meanwhile, at the Lookout, the pups are standing outside the Lookout also wearing hats to celebrate Hat-a-Palooza day. Marshall walks by wearing a cowboy hat, pretending to be a cowboy, while Rubble wears a pirate hat, pretending to be a pirate. Then, Marshall stops by Ryder who is dressed up as a baseball player. However, Rocky has not finished his hat yet. He is searching for some junk in his recycling truck to make one. Once he is finished, he reveals his hat which is made from some old junk and toys. Marshall and Zuma notice their tug toy on Rocky's hat, and start playing with it. Then, Ryder receives Alex's call. After Mayor Goodway and Alex tell Ryder about the incident, he summons the pups to the Lookout. However, Marshall who still has the tug toy in his mouth, is being levitated by the crows. Then, Marshall lets go, and falls onto a ball, cause him to move around on it, and crash into the elevator. Once the pups get to the top, Ryder gives the pups their orders: Rubble is told to lift the statue and keep it steady with his bulldozer's crane arm, and Rocky is told to repair the statue's base to prevent it from falling again.
When they get to City Hall, the Mayor cannot hold the statue any longer. So Ryder tells Rubble to lift it with his crane arm. After Rubble does so, Ryder tells Rocky to secure the statue's base so it won't fall again. As Rocky does what he is told, Ryder questions how the statue fell, and Mayor Goodway and Alex tells him about what happened earlier. Once they're done, Ryder, Rocky and Rubble return to the Lookout to continue celebrating Hat-a-Palooza day. As they leave, the Mayor notices that the hatband is missing. Alex, who saw the incident tells her that the crows had took it earlier. Alex then summons his Mini Patrol to his treehouse. Once they get there, Alex orders Little Hootie to find the crows at the bay, Cali to climb up a tree using her claws to look for their nest, and the other three to cheer them on. Later, Alex spots the crows flying in the sky, and orders Little Hootie to chase after them. Then, Little Hootie lands onto the foghorn of the Flounder. However, he becomes startled by the sound of the foghorn blaring. Cap'n Turbot sees him and lets him know that he is also celebrating Hat-a-Palooza day. He is even hanging up a windsock on his boat. Alex stops by and asks him if he saw the crows. But Cap'n Turbot disagrees. Then, they continue their search for the crows.
Meanwhile, as they leave, Cap'n Turbot sees them flying around in the sky and they fly over to him tearing off his overall straps causing them to fall down revealing his underwear, causing him to become embarrassed and fall off his boat, hanging upside-down off of it. Then, he calls Ryder to tell him about what happened, as he explains about the incident, the windsock flies away from the wind. Ryder then orders Skye to catch the windsock. Then, when the two get there, Ryder tells Skye to use her helicopter's hook so Cap'n Turbot can grab it. After Turbot is brought down to safety, Ryder tells Skye to catch the windsock. Meanwhile, Alex and his Mini Patrol find the crow's nest which is on top of a tree in front of City Hall. Alex then tells Cali to climb up the tree, but she is too tired, so Alex attempts to climb up the tree. In the nest, he finds Mayor Goodway's hatband and some other stuff the crows took such as the pups' tug toy. Alex then starts celebrating, but then he makes the tree's branch break.
Back with Skye, she finds Cap'n Turbot's windsock on top of the bridge, but then hears Alex yelling for help. She then uses her goggles to see Alex, and then contacts Ryder about the problem. After that, Ryder contacts Chase and Marshall to help Alex. When they get to City Hall, the branch is getting weaker, and Ryder immediately tells Marshall to use his ladder to get Alex down from the tree branch. But the mischievous crows press the ladder button on Marshall's fire truck causing him to swing around. Then they press it again causing the ladder to stop moving, and Marshall to fly off and land into a shrub. As this happens, the branch continues to break, causing the crows' nest to fall off. Ryder then tells Chase to use his net. Chase does so, and manages to catch Alex. Everyone thanks Alex and his Mini-Patrol, when the crows fly down to their nest. Alex apologizes about what happened to their tree and nest. Chase then suggests that they help the find a new nest, when the Mayor offers the crows her hat as a nest. Once Marshall places the hat on a tree branch, the crows and Little Hootie surround him, causing Marshall to explain about how birds love him. Later, Mayor Goodway who is only wearing her hatband wishes everyone a happy Hat-a-Palooza day. At the crow's new nest, one of the crows lay an egg, and the egg breaks causing a baby crow to hatch out. The newborn baby crow chirps at the camera ending the episode.