One day, Squidward is gardening when he sees that his kelp is all wilted. He uses a spray called Kelp Grow to make them grow taller and healthier. When SpongeBob and Patrick see this, they steal it from Squidward and fiddle with it by spraying things in town. Squidward gets very mad that they stole it, because one of the things they sprayed was his nose. They go around town doing "good deeds," such as expanding Gary's shell and turning one of Mr. Krabs' pennies giant because SpongeBob mentions that Mr. Krabs always wanted to make "big money" (though this wasn't what he meant). Squidward finally catches up to them and forces them to shrink his nose. However, when they try to shrink his nose, it only gets bigger. SpongeBob and Patrick decide to even out his entire body, which turns him into a "giant monster" who the residents believe to be invading Bikini Bottom. Many fish gather into a mob and threaten to hurt Squidward in various ways. A small boy appears in the crowd and suggests that Squidward might be a nice monster like the one in his storybook. To keep the Bikini Bottomites from hurting him, Squidward quickly agrees with the little boy and tells the town he can actually help them and won't destroy the town. Throughout the day, citizens ask him to help them with various things, which Squidward does to prove he is nice. He gets more and more tired from doing the town favors, though. Eventually, he gets tired and Nat sneezes which Squidward presumably didn't hear. This causes the Bikini Bottomites to turn on him as he didn't say bless you. He runs away to a remote location outside of town when the day ends, where he misses his comfortable old life and is forced to sleep on a makeshift bed of coral. He finds that Patrick and SpongeBob are having a sleepover in his belly button because they wanted to show that they still considered him a friend. Squidward forces them out, and begins crying because of what happened to him. This captures the attention of SpongeBob, who feels bad because they only enlarged Squidward as a good deed. The next day, SpongeBob and Patrick give him the greatest present that he could ever have: a giant clarinet with exquisite sound to make up for the mishap their first good deed caused. When Squidward starts playing it, he shrinks back to his normal size. He is upset that he can no longer play his giant clarinet, but realizes he still has his kelp garden. He runs home to his garden, but finds the kelp from his garden to be cut down. He wonders what happened to his garden, and SpongeBob explains that they used his kelp to make him a kelp-mache clarinet. This enrages Squidward, causing him to chase after SpongeBob and Patrick as the episode ends.
When SpongeBob and Patrick make Gary's shell grow, it looks like Prehistoric Gary, and his shell in "Ugh" ("SpongeBob B.C. [Before Comedy]").
Giant Squidward is similar to SpongeBob in "The Sponge Who Could Fly," he originally does favors for people using his superpower, but then turns into ridiculous things like doing homework, help with plants, etc.
SpongeBob & Patrick were actually doing bad deeds, not good deeds, although not on purpose.
This is the second time that Squidward's size changes, and says the exact quote, "What did you do to me?!"
The scene where SpongeBob and Patrick are watching Mr. Krabs and Patrick's belly button sucks in SpongeBob could possibly be an allusion to the video game Kirby's Adventure, in which King Dedede inhales Kirby and spits him out to defeat Nightmare, but the technique in this scene was used to spray Mr. Krabs' penny with the Kelp Grow to make it bigger.
When the boy says Squidward may be a nice giant, he uses a book with a nice giant in it as an example.
It was a reference to the Roald Dahl's The BFG, one of the most famous books in which there are nice giants.
Squidward is tied to the ground by the people of Bikini Bottom similar to how Gulliver was tied by the Lilliputians in Gulliver's Travels.