In the middle of the night, a small sheep escapes from a mysterious lorry and enters the house of Wallace and Gromit, who are currently running a window-cleaning business. The next morning, Wallace and Gromit fail to notice the sheep chewing at their food and furniture, as well as their new Porridge Gun, before they leave for work. While they clean the windows of a wool shop, Wallace meets and falls in love with Wendolene Ramsbottom, the shopkeeper. She is the daughter of a late inventor and owns a sinister dog named Preston, who runs a sheep-rustling scheme to supply the shop. After returning from work, they finally discover the sheep, who has wrecked their furniture and is covered in mess.
To clean him up, Wallace puts the sheep into one of his inventions; the Knit-o-Matic. Gromit programs it to give a "Wash". However, the device unexpectedly becomes faulty and resets to "Light Shave", and proceeds to suck the sheep into the rest of the machine, give him a shear and knit his wool into a small sweater. The sheep emerges from the machine shivering, despite being unharmed; Wallace names him "Shaun" (a pun on the word "shorn") and dresses him in the sweater. Preston spies on the scene while hiding in a drain and after they leave, he sneaks in and steals the design blueprints for the Knit-o-Matic…
