It appears to be evening or early morning in Peg's neighbourhood. Ramone, narrating, introduces Peg (in her room looking at photos with Cat) and describes her as energetic. He lists a few cool things she's done in the past like going to space and taming dinosaurs. Ramone then reveals that Peg is looking at the photos because she's bored, and enters her bedroom wearing a suit.
He talks about boredom as Peg complains that everything seems the same. She wishes for something different, and Ramone says that she should be careful what she wishes for because she's about to go into the eponymous Highlight Zone. As he says so, the scenery turns black-and-white.
Peg gasps, and Cat wakes up to ask why everything is black and white. Then, a spiral appears on the bedroom door, which spins in a circle... and we cut to Ramone reading out the episode title.
Back in Peg's room, she introduces herself and Cat and complains about the world being too "bleh" now that the colour is gone. Ramone enters and offers to help: he reveals that they're in another dimension that has a few differences from their proper one, known as the Highlight Zone.
Peg notices that one difference is that her bed is very tall, and then the bed instantly turns normal. Ramone explains that when one sees a difference between the Highlight Zone and the prime universe, one must circle it to bring it back to normal. Once ten objects are restored this way, one can leave the zone.
Ramone leaves, then Peg tries to follow him out and they end up on the Purple Planet (although it's grey now) and Richard is there, crying because he thinks Peg confused him with Ramone (she was calling his name). Peg then thinks of something troubling: she has nothing to compare this version of the Purple Planet to. Or at least, she thinks she doesn't. Turns out Cat accidentally brought the photo album. They use a photo to point out that in the Highlight Zone, Richard's safe is round rather than square, and Big Mouth has a squiggly unibrow instead of his usual eyebrows.
This gives the aliens their colour back and the protagonists jump into a crater and land in a wagon. They smell a bad smell, which Beethoven reveals to be wurst. As it turns out, they're in the wurst shop. Peg notices that the wurst is now rectangular, and the three short men and one tall man who frequent the store have switched heights. She circles them and the sausages and men turn normal.
Then, Ramone somehow teleports them to the circus. He challenges them to find the differences while walking the tightrope and juggling monkeys. To make matters worse, Peg drops the photo and there is a flaming hoop. She tries to reach it with the trapeze, but misses, so she forms a chain with a monkey, then another one and succeeds just before it burns. As it turns out, the differences are that the platforms have changed shape.
Ramone teleports the duo back to outside Peg's house. As it turns out, the fire hydrant is now a cube and Connie is now taller. However, Peg freaks out because there's one more difference and she can't find it. However, she eventually does find it... her marble is now a pyramid-shaped object.
They're now back in the normal zone... and it turns out to all be a dream Peg had while sleeping on the floor during a play date with Ramone and Richard. She wakes up and starts singing about the dream and about how she's grateful that the world is the same.
This episode provides examples of
- All Just a Dream: As it turns out, Peg dreamt the whole episode.
- Barefoot Cartoon Animal: In the circus, Cat suddenly wears a onesie, but no shoes.
- Chekhov's Gun: The photo album Peg looks at in the beginning comes in useful in comparing differences between the prime universe and the Highlight Zone.
- Delayed Reaction: It takes Cat a few moments to realise everything is in black-and-white.
- Deliberately Monochrome: The Highlight Zone looks just like the normal Peg + Cat universe, but in black-and-white.
- Dreary Half-Lidded Eyes: When Peg is bored, she half-closes her eyes.
- Furry Reminder: In the beginning, Cat is seen sleeping curled up.
- Inexplicably Awesome: It's unclear how Ramone knows so much about the Highlight Zone, or why he can teleport Peg and Cat places.
- Left the Background Music On: When Peg is complaining about everything being the same, she reveals that she can hear the score (describing it as playing in her head) and complains that it's too repetitive.
- Mundane Made Awesome: Ramone says, "Today... she's bored!" dramatically, while dramatic music plays.
- Or Was It a Dream?: Downplayed. Ramone asks the viewers if it was really a dream or if the zone really exists and then the screen goes black-and-white. However, since Richard and Cat were confused and saw Peg sleeping the whole time, it was most likely a dream and the colour change at the end was just a cartoon gag.
- Remember When You Blew Up a Sun?: Ramone remembers Peg taming dinosaurs ("The Dinosaur Problem"), going to space (several episodes), and helping compose Beethoven's fifth symphony ("The Beethoven Problem").
- Shout-Out: The eponymous zone was named after a TV show called The Twilight Zone (1959).
- Tempting Fate: Peg complains of boredom moments before everything turns black and white.
- Unusually Uninteresting Sight: Peg doesn't seem to notice Ramone entering her room in a suit and narrating.
