Penelope is a pleasant little pug who has quite the quandary: All she can remember is that she lost her Lady in the park while chasing the most dreadful squirrel. Now she dreams of one day finding a new Lady and a permanent place to stay. So when she finds herself taken in by the kind Lady Diggleton, she can't believe her luck! But Penelope soon discovers that Lady Diggleton is searching for her previous owner and worries she will have to leave the Lady she's come to love. To make matters worse, that dreadful squirrel keeps poking its nose in wherever Penelope happens to be. However shall she keep herself from chasing it again and ruining all hopes of tea parties, elegant balls, and a forever home?