Percy the Small Engine is the sixth episode of the Engine Friends miniseries.
At Knapford, there is no sign of the morning train, causing the passengers to become angry. The Fat Controller is told by the stationmaster that Henry is refusing to leave his shed, so he goes to find out what is going on. Gordon tells him that he, James, and Henry will no longer fetch their own coaches or shunt in sidings, declaring that tender engines do not shunt. The Fat Controller is very angry that the bigger engines are trying to tell him what they are willing to do and leaves for Wellsworth to enlist Edward as a station pilot to ensure that the day's trains run as normal, noting to himself that life at the yard has not been the same since Thomas left to run his branch line. Edward is happy to shunt the coaches and the rest of the day's trains run as usual.
Next day, the Fat Controller visits the yard to see how Edward is getting along. To his dismay, he sees Gordon puff by and wheeshes loudly at Edward. Edward tells the Fat Controller that the big engines have been insulting and wheeshing steam at him, thinking he is a traitor since he is a tender engine as well. The Fat Controller assures Edward that tender engines do shunt, but decides that he must bring a new tank engine to the yard to permanently fix the problem.
Visiting the engine workshop, the Fat Controller is shown all kinds of engines. Soon he sees a smart green saddletank and knows this is the one he wants. The Fat Controller asks the engine if he is willing to work hard. The engine eagerly responds that he is. With that, the matter is settled. The Fat Controller names him Percy and takes him back to the yard.
The Fat Controller asks Edward to get Percy acquainted with the yard and the pair set off for work. Edward is very impressed by his hard work and loud wheeshing - something he learned in the workshop so as to be heard, which frightens Henry when he attempts to insult Edward again. The Fat Controller then decides to send for Thomas and calls all three engines to the yard for an announcement. He tells them that he has shut up the big engines in the shed as punishment for their little mutiny until they learn to behave and that, in Gordon, Henry, and James' absence, the two tank engines and Edward will run the railway.
Edward and Thomas are put in charge of the main line, while Percy takes care of the branch line as well as looking after Annie and Clarabel. While there are fewer trains, the passengers understand that the three engines are doing their best to keep the railway running and that the big engines were in the middle of learning a lesson.
In the sheds, Gordon, James, and Henry are left cold, lonely, and miserable. The three finally start to realize just how silly they have been.
Later, Percy has been frequently working the dirty jobs involving trucks and longs for a washdown as much as any engine. Unfortunately, when he goes to the washdown, Percy and the other engines are informed by the Fat Controller that, due to a water shortage, all engines can only have one wash per day and that usefulness comes before cleanliness. This annoys Percy as he thinks that Gordon only needs a washdown to feel important. Gordon points that he is important as he pulls the express. James teases Percy, who does not see the funny side before going back to work.
Percy returns to work at the coaling plant, determined not to get dirty. But the trucks are up to their old tricks, and pull Percy right under the coal hopper, and coal pours on top of him. On their way to Callan, the trucks tease Percy by singing a rude song to him. Percy hates it when they make fun of him, so he angrilly tells them to stop it.
Once at Callan, Percy shunts the coal trucks into a siding, right alongside Harold who is unloading medical supplies. Harold takes off, spreading cinders and ashes all over Percy, who demands for a washdown, but his driver reminds him that usefulness comes before cleanliness, but Percy wants a clean job more than anything. The driver suggests taking vans of sugar to the chocolate factory, so Percy takes the vans of sugar, feeling happy.
Percy, thinking that he finally has a clean job, is unaware that a patch of oil had been caused by a leakage from a truck in the siding at the chocolate factory. Upon arrival, the brakes are applied but Percy slips on the oily rails and crashes through the wall right into the chocolate factory, across the factory and out the other end, covered in chocolate.
When Duck brings Percy back to Tidmouth Sheds, Thomas, James, and Henry tease him saying how chocolatey he is, but Gordon disapproves. The Fat Controller knows how much work Percy had done despite his problems and the accident; and as he proved that usefulness comes before cleanliness, Percy is rewarded with a washdown and a new coat of paint which makes Percy happy.