Troi is busy talking to Clara Sutter, a young girl who's essentially a "Starfleet brat"; she's been on one ship after another following her somewhat remote father's career, and has never stayed in one place too long. Clara has an imaginary friend named Isabella; but although her father is worried that "Isabella" is keeping Clara away from making any real friends, Troi reassures him that it's perfectly normal.

Meanwhile, the Enterprise enters a mysterious nebula, only to have a small glowing object enter the ship. It inspects things for a bit, then finds Clara working in the arboretum. It reads her thoughts, and then reforms; and "Isabella", now very real, greets Clara. Clara's very puzzled, but happy to see Isabella turn real, and Isabella quickly talks her into leaving the arboretum and roaming the ship.

Suddenly, the Enterprise shudders as if hit by something. Strangely, the shields registered an impact, but the sensors showed nothing of the sort. The continued drag on the ship slows it down more and more, until Isabella (invisible, after Clara had entered and been told by her father to go back to quarters) sneaks into engineering and somehow fixes things. Geordi and Data are mystified, but recommend staying around and collecting samples; Picard approves.

As Ensign Sutter talks to Geordi about Geordi's own childhood living from ship to ship (and is reassured by Geordi that Clara should turn out fine), Clara winds up in Ten-Forward, where Guinan keeps her busy until Troi arrives to bring her back to her quarters. Troi sternly tells her that she should be able to tell Isabella (whom no one believes is real and no one has seen) not to take her places she's not allowed, but Clara says Isabella won't listen. Concerned, Troi arranges to take her to a ceramics class without "Isabella" present later that day. As Isabella tries to manipulate Clara into going to engineering again, Troi arrives and whisks Clara off to class.

As the Enterprise registers another mysterious impact, and Geordi finds that they've been hitting "strands" of coherent plasma which the warpfield should illuminate for them, Isabella becomes more vindictive, wreaking some havoc in the ceramics class and then telling Clara that she no longer cares. "Now...when the others come...you can die with everyone else." The Enterprise finds that the strand density is getting thick enough to be a problem, and attempts to turn around and leave the nebula.

Meanwhile, a terrified Clara refuses to go into her room, and it takes Troi's promise to go in with her and make sure Isabella isn't around to get her inside. The search Troi makes for "Isabella" turns up negative at first; but when Troi looks in the closet, Isabella appears behind her. Troi turns and gasps, just as Isabella zaps her with some sort of ray and knocks her unconscious. Troi revives later in sickbay and tells Beverly and Picard of Isabella. They take what measures they can, but then the "web" of strands around them tightens, and more entities like Isabella attach themselves to the ship and begin draining the shields. With no other choice, Picard takes Clara back to the arboretum and manages to bait Isabella into appearing. She tells him that her people need energy, and that the crew's cruel behavior towards Clara suggests that they should be destroyed. Picard manages to clarify that the rules Isabella sees as so restrictive are actually to protect Clara from harm, and Isabella calls her people off and leaves, later appearing one last time to Clara to apologize and hope that she'll one day return.