Back home after an extended honeymoon, newlywed Alice is worried that she is getting fat and losing her sexual allure. Neither she nor Hugo have a clue that a baby Horton is on its way. Geraldine has to explain to Alice what is happening.

The Dibley Parish Council puts on a Christmas nativity play that no-one will ever forget. Hugo makes a complete bodge of organizing it, so Geraldine conducts a series of strange auditions and hastily masterminds the show. What could possibly go wrong with a heavily pregnant Alice playing Mary?

The Bishop of Mulberry is to officiate at the christening of Alice and Hugo's baby. Geraldine and Owen are to be the godparents, while Frank and Jim act as god-grandparents. When an amazed David finds that he and Geraldine are well-matched, he asks her to marry him.

This summer in Dibley is a scorcher, and there is a water shortage. The water company decides to implement a plan to build a reservoir and flood the village. Residents have been offered large sums in compensation, and the parish is divided. Geraldine takes drastic action to save Dibley.