Jimmy Felbs, a nine year old fourth grader, has just finished listening to his teacher read a mysterious story about an evil witch who turns a princess into an alligator. As Miss Fanlin closes the book, she states, "But, of course, there are no witches living now." Then Jimmy inadvertently irritates his teacher by innocently proclaiming that he knows a witch, a very nice witch---Miss Caroline Grimsbee, the president of the Demmansville Flower Club and sole surviving member of the town's first settlers. Miss Fanlin reacts with shock and annoyance, and keeps Jimmy after school for lectures on respecting his elders and how mythological creatures don't exist.
Miss Grimsbee resides in an old Victorian house with a lovely garden. She lives with Melisand, who makes the best chocolate cookies in town, and a talking tortoiseshell cat named Paddock.
The trio listen to Jimmy's tale of woe, and Miss Grimsbee, who has led a fairly circumspect existence until now, decides to prove that she's a witch by turning Miss Fanlin into an alligator handbag. The transformation takes place at a department store, and the consequences are amusing, as the mayor purchases the bag for his wife's birthday, and the gift transforms back into Miss Fanlin just as the recipient unwraps it.
The shaken Miss Fanlin explains what happened, and the mayor calls a meeting of the school board. The science teacher on the board telephones Miss Grimsbee, who admits that she's a witch, but the teacher dismisses her comment as a joke. And so Miss Grimsbee decides to definitively prove her supernatural status.