In the 1920s, at a hospital in Bozeman, Montana, a boy named Petey Corbin is born with cerebral palsy to Sarah Corbin. The doctor diagnoses him as physically and mentally disabled, unable to walk or talk and has no capacity for thought. Devastated, Sarah and her husband spend two years and enormous sums of money going to doctors, but each tells them to send Petey to an institution. The Corbins decide to send him to a psychiatric hospital, although called an insane asylum (in 1922), in Warm Springs, Montana.
The story's point of view then shifts to Petey, following his life in the hospital. The nurses in the crowded and unsanitary institution care for him lazily and improperly, some even abusing him. A new male nurse named Esteban quickly befriends Petey. Whenever he can, Esteban talks to Petey and brings him chocolate, as Petey is "his favorite". Esteban understands (unlike most people) that Petey is not retarded, but that it is only his body that is deformed. Esteban is discharged for informing civic leaders from Butte that Petey isn't, in fact, retarded.
At the age of eleven, Petey is transferred to the Men's Ward. He is put in a large room with several bigger men. Soon after, he notices a family of mice living in his room. They are his only joy until a new person, named Calvin, moves into Petey's room. Mildly retarded and club-footed, Calvin quickly becomes Petey's best friend, and the two spend all their time together. Petey and Calvin meet many people in the Warm Springs Insane Asylum including Joe, Cassie, and Owen, however they all leave them at different points in time. Eventually, many patients are moved to different facilities. Petey and Calvin are separated when Calvin is taken to a nursing home. Months later, Peter is also transferred to a nursing home. The story then proceeds to travel several years later.
In 1990, outside, he is getting bullied by teens. They are throwing snow balls at Petey. But another teen, Trevor, gets in and stops the bullies.
Trevor also gets Petey a new wheelchair and takes him out. Eventually, though, Petey becomes ill and his health declines. Trevor visits him in the hospital as much as possible and asks Petey to be his symbolic grandfather because of the great impact Petey has made in his life. As Petey dies in the hospital, he communicates that Trevor should go and live his life. As the story draws to a close, Trevor says goodbye his "Grandpa Petey" as he dies with dignity.