Mayor Giuseppe Bottazzi , is up for election on the Communist ticket, attends church and opposes his rival and one-time aide in the war against oppression, Catholic priest Don Camillo.
Peppone has been elected mayor and Camillo is bidden to ' a great ceremony'. He is requested to bless the foundation stcne of the People's Palace - but where did Peppone get the ten million lira to build it?
Peppone is outraged that his ugly cousin, who has been the unpaid servant and admirer of Milco, has been disgraced in the town by the appearance of Frieda and her 7-year-old son. Frieda is staying at Milco's house, and Milco, a widower, is therefore, according to Peppone, in need of moral instruction.
Peppone writes a speech he thinks will bring him fame, but Smilzo loses it. It is found and handed to Camillo who humbles Peppone in front of his congregation, which does not please the Lord.
Food parcels arrive from America and Don Camillo distributes them to the poor of his parish. Meanwhile the Communist Party District Inspector has visited Peppone and calls for a harder line.
Camillo's old film projector finally gives out and he is at a loss what to do to entertain the villagers on a Saturday night. The alternative for them is the dance held by the Communists at the People's Palace.
There is a mystery as to who is the villager who has won the lottery. Camillo works out the anagram of the name and the winner comes to the conclusion that a Communist cannot be a Capitalist.
Del Cantone wishes to donate one million American dollars for the founding of a home for old people and poor children, but his hatred of Communism is so great that he abandons his own village and comes to see Camillo.
Easter time. Camillo finds a large red-painted bomb on his doorstep-a relic from the war, and a present from Peppone. All this rivalry escalates to the point where the Bishop hears about it and has to go to Camillo to find out the situation for himself.
Brusco and Peppone are about to lose face in the village because Brusco, having given away his son to his sister to raise, is expecting his return. The problem is that in the interim the son has become a priest.
Stalin is purged by Khrushchev. Peppone refuses to part with his banner of Stalin and is in danger of being disgraced by the Party.
Camillo tells the village that all Communists have been excommunicated. In retaliation, the Central Committee abolishes Christmas which upsets Peppone's wife and child. Peppone takes down the Christmas star and puts up the hammer and sickle.
Election day. Dario Camom is recognised as a man who was once a leading and powerful fascist - and whose practical joke was to force people to take overdoses of castor oil. He is chased from the election meeting and seeks refuge in Camillo's house.