George is an imaginative, eight-year-old boy living on a remote farm. Bored and isolated without playmates, he decides to invent a magical medicine to cure his grandmother's foul temper. He respects certain household rules, such as avoiding the human medicine cabinet, but shows daring creativity when mixing household items like dandruff cure, flea powder, engine oil, and animal pills in a large pot. He experiences a sudden sense of wonder and empowerment when his concoction begins to boil and produce magical blue smoke.

Grandma is the elderly matriarch of the family. She is a small, chronically grumpy woman who requires constant attention and regular doses of medicine. She spends her mornings ordering George around, boasts about eating slugs and caterpillars, and frightens him with claims of possessing dark magical powers. She has a puckered mouth and an icy smile, taking visible joy in dominating the household and belittling her grandson.

Mrs. Kranky manages the household while her husband works the fields. She dutifully cares for her demanding mother, attempting to maintain peace in the family despite the heavy emotional toll. As strange events unfold on the farm, she acts as a cautious voice of reason. She warns her family about the unpredictable consequences of mixing unknown substances and expresses concern for the welfare of the farm animals subjected to their experiments.

Mr. Killy Kranky is an excitable farmer described as a small man with bandy legs and a large head. He frequently clashes with his mother-in-law and views her constant presence as a frustrating nuisance. When he discovers the bizarre properties of George's homemade medicine, he immediately shifts his focus toward mass-producing the mixture. He eagerly buys up household supplies in town, prioritizing global financial gain over safety or caution.