Ratio Rasch, the president of planet Gyllenblå, has banned laughter and emotions in order to create a society based on reason. Police are constantly patrolling the planet and anyone caught laughing is imprisoned and given anti-laughter serum. Only a few members of an underground guerrilla oppose the president. On Earth, the eccentric Dr. Krull listens to signals from outer space and realizes that something needs to be done so he sends the two children Cecilie and Fredrik to Gyllenblå. Epicykel, a guerrilla member, senses their presence and hopes to get to them first but fails. The children are put in school, where Fredrik has great difficulty controlling his laughter but Cecilie adapts well. The guerrilla knows that laughter is contagious and Fredrik gives them new hope of returning laughter to the people of Gyllenblå.

Peter-No-Tail (Pelle Svanslös) is a cat who was born without a tail. He compensates this by studying hard and, much to the dismay of his arch-rival Magnus (Måns), he receives a fancy university degree very few cats in the university town Uppsala, Sweden have obtained. Peter is visited by his American relative Pelle Swanson who invites him to visit his new home country America - in the movie called Americat. There everything is bigger and everything seems possible.

9-year old orphan called Rasmus runs away from the orphanage. He meets a vagabond they call Paradise Oskar who likes to sing and play his accordion. Oskar makes the Rasmus world seem like a better place.