The first chapter of Frindle describes Nick Allen's first acts of creative rebellion. Chapter One tells how he transformed Mrs. Deaver's third-grade classroom into a tropical paradise, complete with sand, and how he disrupted Mrs. Avery's fourth-grade class by chirping like a red-winged blackbird. These experiences set up the expectation that Nick will always find a way to get around teachers and their attempts to control the classroom.

However, that all changes in Chapter Two when Nick gets to fifth grade and has Mrs. Granger for language arts. While she was known to have a fine sense of humor, Mrs. Granger is legendary at Lincoln Elementary for three things: her strictness, her high standards, and her love of language. She sends a letter to all parents letting them know they had to have a good dictionary at home. While the other teachers start the school year by just letting the kids chat, Mrs. Granger puts them to work right away. Nick tries to disrupt the first class by asking a "thought-grenade" question about where all the words in the dictionary come from, only to have it backfire when Mrs. Granger assigns him an oral report on the subject.

While researching where words come from, Nick hatches a new plan to disrupt class. He makes his report extra long and incorporates reading a tough article from the dictionary out loud, thus whiling away most of the class period. Mrs. Granger eventually shuts him down, but Nick tries to disrupt things again by asking who decides which words mean what. Mrs. Granger tells Nick that he does—that people do.

This sparks another rebellion. As Nick is walking with his friend Janet Fisk, she finds a pen. Spontaneously, Nick calls it a "frindle." He gets his friend to help him, and they all visit the local store and ask for pens by asking for frindles. Once they establish the word there, Nick stages an event to use it in Mrs. Granger's class, asking a friend for a frindle. The kids say "frindle" instead of "cheese" when they are getting their school pictures taken. Mrs. Granger imposes a rule forbidding the use of "frindle," and requiring anyone who uses the word to stay after school. This backfires, and more and more kids choose to use the word and stay after school. Mrs. Granger calls Nick in to discuss this, and shows him a curious letter, which she does not give to him, but instead has him sign across the flap to ensure that it stays sealed.

The principal visits the Allens at home to try to get them to make Nick stop using the word, but Nick's mom argues that it is not a big deal. Soon after that, a reporter from the town paper learns about the frindle controversy. The principal tries to downplay the issue, but the reporter writes a lively story, helped along a bit by Mrs. Granger's informative comments and by a copy of the "frindle" class photo Nick sends her anonymously. The school superintendent gets upset that the school was made to look bad. All of this attention makes Nick a little uncomfortable.

Soon "frindle" gets even more attention, because local tycoon Bud Lawrence trademarks the word and starts printing pens with "frindle" on them. The controversy dies down for a while, and then a Boston television station picks up the "frindle" story. Nick tells the story of the word on television. The story is so popular that Nick appears on Late Night With David Letterman. The "frindle" story is then featured in People.

Bud Lawrence starts marketing frindle goods again, but his lawyer warns him that since everyone knows Nick invented the word, there could be legal trouble down the line. Bud then visits the Allens and negotiates the right to market frindle merchandise…with Nick getting 30% of all profit. Nick's dad sets up a trust fund for Nick, and as the frindle craze spreads around the world, the money pours in. Nick, though, grows hesitant now that he is a celebrity. He is afraid his ideas will be given too much weight and this paralyzes his lively mind for the first time in his life. Mrs. Granger sees Nick’s distress and counsels him on not letting the attention oppress him.

Nick listens and goes on to reform the school lunch program. He finishes high school, and goes on to college. Ten years pass. When he turns 21, he gets access to his trust fund, and finds he is quite rich. He shares quite a bit of money with his family. He also gets a very special gift, or rather, two gifts. He receives a dictionary, one that has "frindle" in it as an official word. He also gets that mysterious letter from Mrs. Granger. In it she explains that she had briefly been angry about his rejection of standard English, but quickly came around to supporting him, but chose to play the villain in the drama to help "frindle" spread as a word. In return, Nick sends Mrs. Granger an anonymous thank-you letter, an announcement that a million dollars have been donated to the school to endow a scholarship in her name, and a writing instrument…with a note saying she could call it whatever she chooses.