"You know what? I'm really glad you guys all live here now. It's like the hermit crab; maybe you weren't born here, but you found this empty shell and made it your home. And now you protect each other."
— Aang to the Earth Kingdom colonists at the Northern Air Temple.
Aang discovers Earth Kingdom civilians have moved into one of the air temples, something he initially dislikes because one of the civilians, a mechanist, has overseen the destruction of most of the original temple in order to make room for new technological devices he has invented. Aang learns that the civilians are outcasts, and that the mechanist is constantly threatened by the Fire Nation to provide them with new war machines. With help from Aang and his friends, they fend off the Fire Nation and save the temple. Aang changes his mind about the initial disapproval he expressed earlier, saying that he is now glad the colonists have made the temple their home.
Team Avatar is listening to a story about flying people roaming high in the mountains. Suspecting that the story may be referring to the airbenders, they investigate further. Upon arrival at the Northern Air Temple the next day, they find not airbenders, but an Earth Kingdom colony led by an eccentric inventor and his paraplegic son, Teo. The inventor has defiled the ancient landmarks with technological "improvements". Aang is at first disheartened by the many changes to the airbending culture of the temple, though he develops a degree of respect for the mechanist's son. Sokka explores the temple to begin work with the mechanist, helping with advanced ways to detect natural gas leaks through use of rotten eggs. Sokka also aids the mechanist in designing a war balloon.
However, this state of relative happiness does not last. Aang notices that the temple is being destroyed by machines, pipes, and gadgets. Upset and hopeless, he asks Teo if there are any parts of the temple still unchanged. Teo proceeds to show him the entrance to an air temple sanctuary and asks Aang to open it, stating, "I've always wondered what was like in there." Aang initially refuses, but later agrees opens the gate with airbending only to discover that the mechanist had found or created another way in and was using the room to store monstrous weapons of war, such as self-propelled tanks and war balloons, all destined for use by the Fire Nation.
Aang confronts the mechanist, who confesses his reasons for his actions. He first explains that their village was victim of a terrible flood, which led to the death of Teo's mother. With no place to call home, the villagers fled into the mountains and discovered the Northern Air Temple. However, the Fire Nation looked to colonize the deserted Air Nomad settlement, which caused the mechanist to plead with War MinisterQin to spare it. They agreed to a compromise where the Earth Kingdom villagers could live in the temple given that they supply an array of weapons to the Fire Nation monthly.
After his speech, the mechanist rushes into his office, followed by Aang and Teo. A bell rings, and the mechanist warns Aang to leave. Aang refuses, and hides behind the open door in the room as War Minister Qin rises up from a makeshift elevator, demanding the promised weapons. The mechanist is on the verge of compliance when Aang reveals himself, airbending the door shut and trapping the minister. The Avatar tells him that the deal is off and slaps him in the face with an airbending move. Enraged, War Minister Qin states, "The destruction of this temple will be on your head."
The civilians and Team Avatar prepare for battle. At first, Teo and Katara express doubt that they will stand a chance against the impending Fire Nation military attack, but Aang points out that the civilians have something that the Fire Nation does not: control over the sky. The mechanist walks in, and he and Sokka reveal their new war balloon design. The mechanist also states that they have four types of bombs to deploy: smoke, slime, fire, and stink, noting to "never underestimate the power of stink."
Fire Nation forces begin to arrive using special grappling tanks to climb the steep cliffs. Soldiers march along the mountain paths, wreaking havoc in the colony. The villagers fight courageously, but the Fire Nation tanks overwhelm them. Every time Aang flips the tanks over, the cockpits also flip, enabling them to continue progressing toward the temple. Teo states that the tanks have a water balancing system. This inspires Katara to use waterbending to fight them, and she is able to disable a few tanks, but there prove to be too many. Appa suddenly arrives, knocking all the tanks away and retrieving Aang and Katara from the battlefield. Out of explosives, the villagers start to lose hope, but suddenly, the war balloon appears. The Fire Nation does not attack it, seeing the Fire Nation emblem emblazoned on the balloon. Sokka subsequently drops several slime bombs from it; however, this does not stop the advancing army.
As the balloon flies near a large chasm a short distance away from the temple, Sokka and the mechanist smell the pungent odor of the rotten eggs used to detect natural gas leaks. Realizing the balloon is out of bombs, Sokka detaches and throws the balloon's hot air engine into the crack, knowing that the balloon will immediately plummet to the ground without power. The engine blows up, and the resulting explosion crushes the invaders, while Sokka and the mechanist are rescued by Aang. Deprived of power, the balloon consequently drops into the Fire Nation campgrounds. After the victory, Aang tells Teo that he is no longer upset by the changes made to the air temple; instead he feels happy that they have made the temple their own, and asks them to continue protecting it.
Down the mountain, Qin and his soldiers find the war balloon, saying, "This defeat is the gateway to many victories," as firebenders inflate the balloon.
This episode marks the first appearance of the steampunk elements that will later become a substantial part of this series' story as well as The Legend of Korra's.
When the mechanist is telling Aang of his settlement of the temple, Aang's staff looks like a regular stick.
While the mechanist is talking about how he came up with the revised gliders, the fur lining on the bottom of Katara's coat is missing.
When the mechanist tells the others that he is merely "improving on what is already here", Aang is seen standing behind him, holding his staff upright. However, in the next shot, when Katara uses the back of his robe to dry her eyes, Aang's staff is nowhere to be seen.
When Teo first shows Aang and Katara the door to the Northern Air Temple sanctuary, all three tubes on the door are horizontally aligned, but when the door is shown seconds later, the two outer tubes are vertically aligned.
Just before Katara takes off on her first flight, Teo is seen behind her, though his glider is not suited up for departure. However, in the next shot, he is soaring alongside Katara. In the shots after that, he is not gliding anymore, though still on the departing platform.
When Aang and Teo confront the mechanist in his office, Teo's open-fingered gloves disappear and reappear several times.
When War Minister Qin demands from the mechanist his monthly supply of weapons, Aang closes the door. In a short flash looking through Aang's legs, Qin's hair is disheveled, but in the next scene, his hair is normal. It becomes loose again after Aang uses airbending against him.
When the gliders are lined up to take off and defend the temple, Katara can be seen standing in line behind Teo, prepared to take off as well. However, in the next shot, she is not there anymore, and when Teo is taken off, she is the one pushing his chair. During the battle itself, she is seen gliding again, though when Aang says to Teo that they need more slime and subsequently glide over to Appa who is carrying the supplies, Katara is standing in the bison's saddle, handing out the ammunition.
In "The Southern Air Temple", Aang states that the only way to reach an Air Temple is on a flying bison, yet in this episode, the Fire Nation troops are able to walk right up the mountain, and would have reached the temple this way had it not been for the resistance.
When Aang airbends the approaching tanks away, they land upside down, however, the Fire Nation insignia remains upright.
A very old Nickelodeon website referred to this episode as "The Northern Air Temple (FKA The Gliders)", indicative of the title given at the 2005 San Diego Comic-Con, where the creators showed animatics for this episode under the title of "The Gliders". In a draft phase of the episode's production, "The Gliders" was its working title.
Sokka and the mechanist's idea of adding the scent of rotten eggs to the gas to identify the source of the leak is similar to the real world process of adding ethanethiol to otherwise odorless LPG to make it detectable for humans.