When Balki shows Larry that Jennifer has been knitting booties, The possibility that Jennifer is pregnant causes Larry to imagine Larry and Balki's future sons becoming best friends in the nursery trying to escape.

When Balki finds out that there is a ghost in their house, Larry refuses to believe it. Jennifer and Mary Anne are convinced when Balki shows them a book about it. So they go up to Balki's room (where the ghost lives) and wait for him to come out. Even when miraculous things start to happen, Larry still doesn't believe it until he's attacked.

Larry and Balki are building a new gazebo in their back yard and as they struggle to build it, it reminds Jennifer and Mary Anne of Laurel and Hardy as we see them in a parody of Laurel and Hardy trying to build a gazebo.

Larry travels to Mypos to try and persuade Balki's mama to let him come back to America. But before he can talk to her, Larry settles happily into the relaxed life style of Mypos and wants to stay. Eventually, he gets fed up and talks to Balki's mama who realizes that it would really make him happy to let him come back to America where is finally sworn in as an American Citizen.

Larry prepares a surprise party for Balki who is taking his college entrance exams. While they are waiting for him to return, they talk about some things they've been through together such as when they first met, the first day at the Chronicle, when they tried to fix Jennifer and Mary Anne's shower, etc. Larry thinks that he has helped Balki come along way but it seems that Balki has been helping him more.

Balki agrees to babysit their new neighbor's daughter Tess and lets her do whatever she wants. She ends up terrorizing the apartment which disturbs Larry who is trying to write a possible front-page story for a city council expose. She also disrupts the staff at the Chronicle.

King Ferdinand of Mypos comes to visit America and dies in Larry's arms - which means that Larry is the new king according to Myposian custom. But convinced that Larry would make a terrible king, they must pretend that he's alive and drop him into the arms of the King's advisor - The Speaker of the Hut.

Balki applies to the ""Baby Quiz"" TV game show for both couples. As it happens, Only Larry and Jennifer are accepted until a last minute drop out of the other contestants, in which Balki and Mary Anne take their places. The prize is a college scholarship for the baby.

Balki has passed his Citizenship test and is about to be sworn in as an American Citizen. So Larry arranges for Balki's mama (Bronson Pinchot in a dual role) to come to American to witness him being sworn in. When Balki's mama discovers that he will not come back to Mypos to live, She is angry and Balki has to go back to Mypos.

When Balki takes Larry's "Wheat" play-script to Lydia's theater, Larry goes down to see the cast. But when the director tries to change the lines, Larry won't let him, so they all quit. But Larry insists that they keep the show by casting him with Balki, Lydia, Jennifer, and Mary Anne, but they've never acted before and make a mess of it.

Larry buys a new car radio that gets stolen. So he puts an alarm in the car that keeps going off all night. So they try to catch the thief red-handed by hiding in the trunk and get taken on an unexpected ride.

Larry wants to put some sparks back in his marriage, and after he fails with Balki's secret treasures, he goes shopping with Balki and accidentally gets locked in the store after hours with a mad dog on the loose.

Larry writes an expose of a money laundering scheme that gets him his first front page story but he's upset when he realizes that Marshall & Walpole too all the credit for his article. Also, Marvin Berman, the money laundering scheme's accountant, is also upset because his boss took all the credit for the scheme that was really his idea. So he shows up at the Chronicle with a bomb and demands a printed retraction.

Balki runs for student body president and lets Larry help and as usual, Larry goes completely over the top. The students however, don't like the idea of Balki's idea of reinstating the language requirement so Larry thinks Balki should lie in order to win but he won't.

Larry is going duck hunting with Mr. Wainwright and Balki wants to go to get revenge on something that happened to him when he was a kid involving a duck. Larry lets him go when he sees what a great shot Balki is but it turns into a disaster when Balki will only let them kill one kind of ducks - pterodactyls.

Trapped on board a runaway hot air balloon, Larry and Balki must find a way to get back to Earth as Jennifer goes into labor.

Larry and Balki wind up in jail after refusing to reveal their source for a commodity scandal, to protect the freedom of the press. They won't stop there; they are very persistent to keep their sources, and take the hard time, but they later get two dangerous cell mates.

After a minor car accident, Mr. Gorpley suggests Larry should sue. So Larry has plans to defraud an insurance company to gain money to help his sister Elaine with her tuition. But Balki objects as usual.

Lydia has been offered the opportunity of having her on TV advice show but she has one problem, she's afraid of cameras. But Larry tries to force her to do the show because of a mistake he made in high school when he turned down an opportunity.

When Mr. Wainwright hires a personal assistant Mr. Glover, Balki gets promoted to the executive staff, but is unaware that it is a scheme that Mr. Glover has to try and implement the American Dream Program. And Larry may lose his job if he doesn't go along with it.

Larry's popular high school rival Bunky McDermott comes to see him and invites him and Balki to a formal dinner party and make him a member of his popular club. Larry is so excited and lies to Bunky about going to the Caribbean but to convince him, Larry and Balki spend some time in a tanning bed and end up getting sunburned.

When Balki practices his magic tricks for the Youth Center Show, Larry refuses to go because he's been having trouble finding a story for Mr. Wainwright. But after he finds out that Margaret Thatcher will be stopping by, he sees a great interview and decides to go.

Mary Anne has been hinting at Balki to propose to her and he has failed one too many times so she threatens to move out. Larry talks to Balki and tries to get him to realize but do to mis-communication, Balki thinks that Jennifer's in love with him and Mary Anne is going to die. But in all the confusion, Mary Anne move out.

Larry was chosen to teach a college course in journalism and Balki is able to take the class. But his standards are set way too high that he fails the whole class.

On Balki's 25th birthday, his mama has a pre-arranged marriage that Balki must go through with, even though he is in love with Mary Anne. So Larry and Jennifer try and find a way to save Balki from being unhappy.