Team Avatar encounters monetary issues, so Toph uses her earthbending to scam Fire Nation civilians out of their funds, earning Katara's disapproval. Toph views Katara as acting too motherly, and a rift forms within the group. To amend things, Katara decides to pull a scam with Toph, but they are caught by an assassin, whom Sokka dubs Combustion Man. He uses them as bait in an attempt to kill Aang, but Katara's quick thinking saves the day. As the group settles down for the night, Toph, with Katara's help, sends a letter to her parents.
The episode opens with Toph hurriedly running toward a statue in Fire Fountain City, trying to evade someone. Several guards capture her, ensnaring her in a net. She yells at Katara, whom she claims had betrayed her. Katara replies that Toph brought this upon herself and had left her no other choice. Toph is dragged away by the guards while still glaring at Katara, who stands firmly by the statue.
The episode backtracks to three days before the incident. Katara and Toph are training Aang, who is blindfolded and must use seismic sense to detect their attacks. When Toph accidentally hits Katara in the chest with a rock, the two start bickering and begin to battle each other. Aang, still blindfolded, tries to figure what is going on from a distance. Sokka suddenly charges from behind a rock, loudly screaming, "Sneak attack!", and makes a failed attempt to strike Aang; the Avatar comments that it is not a sneak attack if it is yelled out loud.
The fight between Toph and Katara continues with the two wrestling in mud. Aang interrupts them and they stop. While Katara goes off to clean up, Toph suggests to the boys that they go into town and have some fun, to which they readily agree. Aang, Sokka, and Toph venture to the city with only one silver piece left to spend. Toph suggests they earn more money from a gambling game below them. She is able to detect through her earthbending that the dealer is cheating others and the means by which he is doing so. She uses her bending to cheat herself, earning them forty silver pieces. When they arrive back at camp, Katara advises them against the action. However, even when Aang makes an Avatar promise not to do so, they do not listen. Later on, Toph cheats in a dice-like game and a test-your-strength game, winning even more money. She also pretends to get run over by a noble's carriage so that Sokka, dressed as a Fire Nation soldier, can scam the noble by accepting money for silence.
Katara continues to warn that these scams are dangerous and immoral. Toph tells her to quit acting like the mother of the group. When Katara suggests Toph is making a fuss because she secretly misses her own parents, Toph angrily walks off.
After going into town to buy a messenger hawk, which he names Hawky, Sokka finds a wanted poster for Toph, who has been dubbed "The Runaway". Horrified, Sokka tears down the poster and later shows it to Toph who is delighted at the nickname and how much money is being offered for her return. Toph convinces Sokka to keep the wanted poster a secret from Katara by giving him funds for Appa's armor and expensive atlases.
While rummaging through Toph's belongings, Katara discovers the wanted poster and confronts the earthbender, who angrily replies that Katara is not her mother and should not give her orders. From that moment on, the two of them refuse to speak to one another. Sokka tries to write an apology message by posing as Toph and using Hawky to send it to Katara, but the young waterbender easily discovers the ruse due to Toph's blindness and subsequent illiteracy. Sokka later talks to Toph to try to mend the rift between her and Katara. As they discuss how Katara's motherly instincts can also be supportive and nurturing, Katara, who is bathing in the water beneath the cliff side where they sit to chat, listens to them. Sokka reveals how Katara took on the role of their mother after her death, so much so that, to Sokka, she eventually replaced the face of their mother. Toph admits that she appreciates Katara's motherly nature, and believes Katara cares for her more than her real mother ever did.
A touched Katara later approaches Toph and suggests that she and Toph work together to collect the bounty that she has accumulated as the "ultimate scam". The group expresses surprise, especially Aang and Sokka, who faint while foaming at the mouth, but Katara is insistent that she can show her fun side.
Katara pretends to turn in Toph to the authorities, depicted in the first scene of the episode. However, the entire scenario turns out to be a trap set up by Combustion Man. Katara and Toph are imprisoned in a cell made of wood, material that neither of them can bend. As Aang and Sokka battle Combustion Man, Toph and Katara try to devise a way to escape the cage. Katara suggests that Toph use her meteorite bracelet to make a saw, to which Toph answers that she left it at camp. Exhausted, Katara wipes her forehead and discovers it covered in sweat beads. She jumps up and starts to run in place, building up more sweat. When Toph asks what she is doing, Katara replies, "I'm making my own water!" She waterbends her own sweat to slice through the wooden cell and escape the prison, earning Toph's praise. Katara and Toph race to help Aang, arriving just in time to save him from Combustion Man. Toph accidentally manages to strike Combustion Man's third eye tattoo with a pebble, knocking him back. He rises and attempts to fire another explosion in the group's direction, only to find his chi blocked. The air around him explodes and the group escapes. While running away, Sokka names their opponent Combustion Man.
At the end, Toph comes to the conclusion that she does not truly hate her parents after all. With Katara acting as a scribe, she writes down a heart-felt message for her parents which she sends Hawky to deliver. The episode ends with Sokka inquiring as to where Hawky is, not knowing that he had been sent off.
The method of incapacitating Combustion Man by striking his third eye is used again in "The Western Air Temple".
In this episode, Toph cheats a scam artist, claiming that she "cheated a cheater". Katara makes a similar statement in "The Waterbending Scroll" to justify stealing from pirates.
Sokka and Hawky's relationship is similar to how Aang explained his and Momo's relationship in "Sozin's Comet, Part 2: The Old Masters", where Aang pretends that Momo is talking to help himself think.
While walking away with his new pet Hawky, and before he notices the poster for Toph, he crosses two other posters. The first poster is a poster for Love amongst the Dragons, a play that was mentioned in "The Ember Island Players". The play also made an appearance in The Search trilogy. The second poster is for the messenger hawk that was downed and had its scroll taken by Combustion Man's raven eagle in "The Beach".
Sokka finally thinks of a lasting name for their unknown attacker, dubbing him "Combustion Man".
Toph does not have soles on her shoes. However, when she is dragged away by Fire Nation soldiers, soles can be seen on her shoes. The same goof appears when Aang, Katara, Sokka, and Toph are running away from Combustion Man after his chi was blocked.
When Katara prepares to bend in the beginning of the training session, the dark red stripe at the bottom of her skirt is gone.
Toph informs the dealer that she is blind. However, at the same time, she takes a coin from Aang and hands it to the dealer as though she is not blind. When she wins, she announces her victory without anyone informing her, which still contradicts the scam she was pulling off.
When Toph is playing the dice rolling game, she earthbends so that the face-up side of the stick matches the other one that already landed. However, being blind, she would have no idea which image was face-up at the time, or how far to adjust the stick that was still rolling.
When Katara confronts Toph about the wanted poster, she is barefoot, but later in the argument, when the scene is depicted from a birdseye view, Katara is wearing sandals.
When Katara is collecting the reward money, Combustion Man appears with a copper-colored arm instead of a silver one.
Toph pretending to be hit by a carriage carrying a wealthy merchant bears similarity to a real insurance scam known as a Flopsy.
This is the only episode in which Hawky appears. After being sent to deliver a message to Toph's parents, Hawky is never seen again.
When the dealer begins his game with Toph, rather than removing the rock from underneath the cup and away from the table, he adds more rocks onto the table. This is to increase the odds of the player winning the first round and draws them into the scam.
Toph's ability to know when she had won caused authorities to believe she was not actually blind. A section of her wanted poster asserts that "she disguises herself as a blind person".
The wanted poster offered a thousand gold pieces as a reward for turning in Toph.
It is interesting to note that the officials imprisoned Toph and Katara in a wooden cell, seeing as almost no one outside of Team Avatar is aware of the existence of metalbending.
This is one of the instances where Toph demonstrates the ability to "see" rocks that are not in contact with the ground.
This is the first and only episode of the first series to begin in medias res.
The town Team Avatar visited was once named North Chung-Ling, but the construction of the giant statue of Fire Lord Ozai caused the people to change the name to Fire Fountain City.
At one moment Toph calls Katara "Madame Fussy Britches", a term which was first used in The Shawshank Redemption.
This is one of many episodes where Sokka and Aang forget Toph is blind and cannot write.