When the children realize that all this has happened before, they come to the conclusion that they are stuck in a "repeat", they and Chef decide to do something about the anal probe Cartman has; they first see a proctologist, then a scientist.
The kids wake up on the ship, and they meet Najix, an alien who looks like Stan's father, who explains that he chose an appearance that would be most pleasing to them.
Najix shows his true form, a grotesque, terrifying monster, with yellow and green skin, four legs, and sharp teeth, so the children have him go through a series of transformations, mostly of celebrities or famous television characters, until Cartman suggests "a taco that craps ice cream".
In outer space, Najix is informed that Earth is being cancelled, because humans' knowledge that they are a reality television show has ruined the program's quality.
When the boys are informed that Earth will be destroyed in order to make way for something more useful, they go to the planet Fognl to meet the alien producers, the "Joozians", Jewish caricatures with large noses and stereotypical accents, described as controlling all media in the universe.
The Joozians agree to this, though they decide to wipe out the truth about Earth's nature as a reality show from the memories of all humans, including those of the boys.
"Cancelled", along with the fourteen other episodes from The Complete Seventh Season, were released on a three-disc DVD set in the United States on March 21, 2006.