On their way to join their friends ice skating on a frozen pond, Charlie Brown confides in Linus that, despite the Christmas season, he is still depressed. After Linus' reproach, and a put-down from Violet, he visits Lucy's psychiatric booth and tells her his problem. She suggests that he direct the group's annual Christmas play to get him involved, and he accepts.
Charlie Brown becomes even more discouraged by his observations of Christmas' commercialization as he heads for the rehearsal: Lucy laments over not receiving real estate for Christmas; Snoopy decorates his doghouse for a neighborhood lights and display contest; and Charlie Brown's younger sister Sally asks him to write a greedy letter to Santa Claus. At the rehearsal, Charlie Brown finds a play fit for the 1960s with dancing, lively music, an uncooperative cast and a "Christmas Queen" (Lucy).