Everything Greg (Zachary Gordon) tries to do in order to become popular (wrestling, theater, safety patrol) ends in disaster, and makes him even more disrespected than before.
Worse yet, his nerdy, fat pal Rowley (Robert Capron) begins to thrive in junior high school. Rowley becomes cartoonist at the school newspaper (a job Greg had desperately wanted) and captain of the safety patrol, and soon has dozens of friends.
Greg is extremely jealous of his old friend, whom he'd always somewhat looked down on. At one point, Greg abandons the little children he was supposed to be protecting on Safety patrol, and gets Rowley blamed for it. Rowley begins to realize that Greg isn't really much of a friend, and dumps him completely.
For months, Greg and Rowley barely speak. They nearly get into a brawl in front of all their classmates, during a schoolyard argument... when suddenly, the teenagers who'd bullied them last Halloween find them. When the other kids run away, the teens force Rowley to eat a piece of the foul slice of cheese that has been decaying on the schoolyard floor for years. Thanks to school superstition, anyone who even touches that cheese is regarded as a leper and a permanent pariah.
When the gym coach chases the teenagers away, the other kids come back, and see that someone has eaten a piece of the cheese. Everyone thinks it's Rowley, and that would make him a complete social outcast.
But Greg lies, to protect Rowley, and says he ate it. Greg tries to get the kids to see that school supersitions about the cheese are silly, and that the social segregation at the school is silly, too. But that falls on deaf ears- all the other kids think Greg has been cursed/tainted forever by even touching that cheese, and they all abandon him.
The good news is, by doing this, Greg has won back Rowley's friendship, and has earned the admiration of the older, rebellious newspaper editor Angie.
And in the end, while Greg never gets the social status or popularity he'd wanted, he does get a prominent photo in the yearbook- he and Rowley appear together as "Cutest Friends."
Thanks John L!