Forty years after becoming the Blue Fairy, Chiara Belmagio defies the rules of magic to help her old friend Geppetto, and when her sister--now the heartless Scarlet Fairy--discovers the transgression, they decide to settle things with a wager, with the lives of Geppetto and Pinocchio hanging in the balance.

Penny feels guilty after taking a beautiful blue marble that she sees in Mrs. Goodwin's grass, but gets a pleasant surprise when she goes to return it the next day.

Howard finds the burden of all the lies he has been telling to be too much.