Peter-No-Tail is a cat who's born without a proper tail on a farm by the Swedish countryside. Due to economical difficulties, the farmer is forced to get rid of Peter. The farmer can't bring himself to drown the cat, so he sneaks Peter inside the car of a family who are renting a house close to the farm for their summer vacation. When the family finally reach their home in Uppsala, Sweden, they find Peter and decide to keep him. Without a tail, he becomes the talk of the town among the other cats and, especially Mike, who teases him cruelly. Mean Mike and his two companions, Bill and Bull, are notorious for the nasty tricks they like to play on other cats. Mike is currently trying to court Molly Silk-Nose, but his rough and silly approach does not impress her, since she becomes interested in the kind and gentle Peter. But Mike won't give up that easily and he has a plan for how he'll get his revenge.

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