The 4077th is designated as the setting for the making of an army film on Mobile Army Surgical Hospital units. Hawkeye is chosen as the star while Margaret and Frank compose a screenplay. The Eye Of The Hawk objects to the piece of propaganda that filmmaker Lt. Bricker is producing and, having exposed the original film, reshoots a new one his way, starring himself as Groucho Marx-ish Yankee Doodle Doctor, and poking fun at glorifying doctors while concluding with a rather serious speech about the hell of war.

Hawkeye creates a fake doctor, Captain Jonathan S. Tuttle, to give supplies to the local orphans. Henry wants Tuttle to be officer of the day, so Hawkeye creates a fake personnel file, and all his back pay is given to the orphanage. When General Clayton wants to reward his generosity, Hawkeye is forced to invent a story about Tuttle jumping from a chopper without his parachute! Of course, Trapper's new friend, Captain Murdoch, obtained the fake dog tags and parachute...!

General Clayton calls to say that a ceasefire is to be declared. The camp celebrates, Klinger gives away his dresses and locals start to take pieces of the camp. But Trapper does not believe it. Hawkeye claims he is married to avoid promises he made to several nurses. The party to celebrate the cease-fire, which never really took place, is interrupted by incoming wounded.

Brought on by Frank and Margaret's negative reports, General Clayton assigns a psychiatrist, Captain Hildebrand, to examine the 4077th M*A*S*H unit, to see if it should be disbanded. Henry tells them to be on their best behavior, or else they will be split up. But the 4077th soon begins to act in their traditional, insane ways: the shrink experiences Max Klinger, watches the hijinks of Hawkeye and Trapper John, and witnesses the trysts of Frank and Hot Lips. While Hildebrand confronts the unit on its behaviour, choppers bearing wounded begin to arrive and everyone heads for the OR. The onslaught of casualties shows the 4077th's true side.

An inept North Korean pilot, known as "5 O'Clock Charlie", makes his daily attempt to bomb the ammo dump. Frank puts in a request for an anti-aircraft gun, which is granted when Charlie hits General Clayton's jeep. Frank takes charge of the gun, while Hawkeye and Trapper are determined to prevent him using it, by getting rid of the ammo dump. Frank misses Charlie and destroys the dump.

Hawkeye and Trapper want the army to admit responsibility for the accidental bombing of a local village. They fill out a report and Major Stoner arrives to investigate, and leaves with all the evidence. When the story is released it claims that the enemy bombed the village, and the army tries to gag the doctors. But, thinking there could be a medal in it for him, Frank has also put a report together, with copies of all the evidence, including shell fragments, so the army comes clean.

Hawkeye has been in non-stop surgery for 3 straight days without sleep, and the wounded keep coming. He decides to find out who started the war, and sends a telegram to Harry S Truman. After listening to some of Frank's rubbish about the North Koreans wanting better plumbing, he tries to send the officers' latrine to the North Koreans with an offer of peace. Trapper finally manages to sedate him. Trapper (about Hawkeye): "I guess he's just unstable. You see, he took this weird oath as a young man, never to just stand by and watch people die."