In Chicago, Illinois, teenager Clifford Peache lives in the Ambassador East Hotel with his father, hotel manager Mr. Larry C. Peache, and his eccentric “Gramma,” who makes mischief in the hotel’s Pump Room bar. On his first day of public school, Clifford arrives at the inner city campus in an Ambassador Hotel limousine and unwittingly becomes the enemy of the class bully, Melvin “Big M” Moody, by making a quip about the boy’s initials, “B. M.” Fearing retaliation, Clifford lingers behind when school lets out for the day, but Moody and his gang lurk in the hall for a surprise attack. They drag Clifford inside a filthy restroom and warn him about a fellow sophomore named Ricky Linderman. The boy is rumored to be a psychotic killer, and Moody has convinced the student body to pay him $1 from their lunch money every day to employ his services as a “bodyguard” against Linderman. When Clifford refuses to pay, Moody shoves a cup of toilet water toward his mouth, but Clifford tosses it back in Moody’s face and leads a chase to his awaiting limousine. Back at the hotel, Clifford’s driver reports the incident to Mr. Peache, who telephones the school principal to protect his son. Although Moody is punished the next day, his rage toward Clifford increases. During English class, Ms. Jump lectures about Romeo and Juliet as the hulking and disheveled Ricky Linderman lumbers into class, much to the horror of the students. Clifford spends the rest of the day dodging Moody’s reprisals, but realizes the bully and his friends have one weakness: They are terrified of Linderman. Clifford follows Linderman into the school gymnasium and tells him about Moody’s “bodyguard” scam, in which Linderman is pegged as the school’s biggest threat. Hoping to put an end to Moody’s tyranny once and for all, Clifford solicits Linderman to take over the role of “bodyguard” and protect his classmates from Moody. Although Linderman refuses to help, Clifford continues his boycott of Moody’s shakedown scheme and other teens follow suit. When Moody traps Clifford in an empty locker, Linderman reluctantly comes to his rescue. Later, at a delicatessen, Clifford sprays bottled condiments and soda pop on the faces of his adversaries. Moody and his friends give chase only to find themselves confronted by Linderman in a nearby alleyway. As classmates look on, Clifford introduces Linderman as his new bodyguard and announces that Moody’s services are no longer needed. However, Linderman turns his back on Clifford, disinterested in his new “job.” Back at school, Clifford asks Ms. Jump about Linderman’s mysterious past and learns that the boy’s younger brother accidentally killed himself with their father’s gun. Linderman found the body. Clifford remains determined to seek friendship with his wayward classmate and instructs his chauffeur to follow the boy into a destitute neighborhood. When Linderman turns down an alley, Clifford follows on foot. After leading the boy on a maze of Chicago back streets, Linderman stops Clifford in his tracks and orders the boy to go away, but he relents when Clifford admits he is lost. Linderman takes Clifford to a mechanic’s shop, where he has nearly finished rebuilding a motorcycle. The bike is missing a rare cylinder that is no longer in production. As the new friends comb junkyards looking for the spare part, Clifford reveals that his mother died several years earlier in an automobile accident and Linderman talks about his dead brother. In time, Clifford discovers the missing cylinder and the boys ride through the city on Linderman’s motorcycle. Clifford invites Linderman to the Ambassador Hotel, where they dine with “Gramma.” As she foretells Linderman’s future by reading his palm, she reveals scars on his wrist from an attempted suicide and assures him that he will have a long life. With new confidence, Linderman lets down his guard and makes friends with his schoolmates, but his contentment is cut short when Moody interrupts a social picnic in the park. The bully introduces Linderman to an intimidating gangster named Mike and claims that the hoodlum is his new bodyguard. Linderman refuses to fight and attempts to get away on his motorcycle, but Mike knocks him over and bashes the bike. While Linderman is on the ground, Moody rolls his prized motorcycle into a nearby lake. Clifford complains about Linderman’s failure to defend himself and the boy runs away. After an unfruitful search for Linderman around the city, Clifford is surprised to find his friend hiding in the shadows of the Ambassador Hotel rooftop. Linderman demands money and lowers himself down the fire escape but Clifford gives chase. At a nearby subway station, Clifford insists that Linderman must come to terms with his brother’s death, but the boy tearfully reveals that Ms. Jump’s version of the killing was inaccurate: His brother did not shoot himself. Instead, the trigger went off in Linderman’s hands, but he placed the gun in his brother’s palm to absolve himself from guilt. Boarding a subway train in despair, Linderman tells Clifford that the true story has remained his secret until now. He asks Clifford to go on without him. Back at school, Moody regains control over the student body. Clifford loses hope of seeing Linderman again, but the boy unexpectedly appears in the park, dragging his motorcycle out of the lake. Just then, the reunited friends are confronted by Moody, who tries to take the bike away from Linderman. When Linderman refuses to give up his motorcycle, Moody’s “bodyguard,” Mike, steps in to threaten him. This time, Linderman fights back and overcomes the gangster while Clifford battles Moody. Although Clifford is smaller and weaker than his adversary, Linderman coaches his friend to win the fight by breaking Moody’s nose. In the wake of his success, Clifford learns he does not need a bodyguard, after all.