Depressed by his feelings with Flame Princess, (mainly due to the fact that Flame Princess hadn't laughed at his joke) Finn enters a pillow fort built by Jake where he enters a new world and makes a new life for himself.
The episode starts off with a knife storm outside the Tree Fort. Jake, who is shaped like a bulldozer, is carrying pillows. Finn, however, is sitting on a pillow chair sulking. After warning him to move out of the way, Jake dumps the pillows on Finn, making BMO fall on Finn's head and CMO on BMO's head. Finn tells Jake to knock it off, Jake apologizes and says he is only trying to cheer him up. He asks Finn how he could be so upset when he is with some of his best friends, and one of them is building an actual pillow fort. Finn replies saying he is just thinking of Flame Princess and said that he told her a joke, but she did not respond. Finn assumes their relationship is over. BMO says that maybe she just did not understand the joke Finn told her, but Finn does not believe it, and says that maybe she has used her laugh on another guy's jokes. Finn then adds that having a girlfriend is hard, to which Jake replies that being crazy is hard and starts explaining that he needs to focus on real problems as opposed to imaginary ones. He demonstrates by throwing his favorite mug outside the window and says that it is not real and he does not care about it anymore. However, Finn still does not understand and decides he needs some time alone. He crawls through the pillow fort and finds a hidden door. Finn opens it and finds a whole new world made of pillows.
He transports to Pillow World, which startles him. The door then magically disappears. Finn then slays the Blanket Dragon which makes the Pillow People happy. He then meets the mayor Quilton, who declares a "celepillabration." At said celebration, he meets Quilton's daughter, Roselinen. The two share a dance.
Meanwhile, at the Tree Fort, Jake pulls his favorite mug back into the house using a fishing pole. When focus returns to the pillow world, a great deal of time has passed. Finn is now an adult and has two children with Roselinen, Jay and Bonnie. Quilton visits and tells Finn that archaeologists have researched the door leading back to Finn's world. He says that the door only appears for a short time.
When the episode switches back to the tree fort, BMO is playing with Jake's mug. It has placed a clown wig on the mug, and one on itself. Jake tells BMO he wants his mug back, but will be willing to make some hot chocolate. BMO says Jake drives a "hard burger." When the focus returns to Finn and his family, once again many years have passed. Finn is a slightly aged man when he visits an oracle, Rasheeta, to ask about the door. However, Rasheeta only answers him in riddles. Finn begins to have second thoughts about leaving the pillow world. Roselinen tells Finn she knows he has to go, but asks only that Finn remember his family when he returns to his "real life," something he is later unable to do. An imaginary flashback of Jake convinces Finn to stay with his pillow family.
Jake and BMO are playing together when the action focuses on them again. BMO asks Jake about his kids, to which Jake replies that Rainicorn babies do not need their parents for long. Back in the pillow world, Finn is an old man on the verge of death. As he dies, he flies through space naked and bounces off GOLB's tongue before emerging out of the top of the pillow fort as a child again. He almost tells Jake about the supposed dream, until Flame Princess calls, telling him that she did not get his joke before and she now understands it. After the call, Jake inquires about the supposed dream, but Finn claims he does not know what Jake is talking about.
- "Puhoy," the name of this episode, is the pillow version of the word "ahoy," which Quilton says when he gets off of the pillow boat to talk to Finn.
- When Finn was told about how he entered Pillow World, he had five fingers when he was rubbing his beard.
- Wallace Shawn is uncredited as the voice of Rasheeta. His voice also seems to be used (shifted to a lower pitch) to portray a distorted Jake in Finn's memory.
- Before Finn left Pillow World, Roselinen asked Finn to remember his family. However, Finn forgets about the dream at the end of the episode.
- When Finn dies, the visuals that occur are eerily similar to visuals produced by Dimethyltryptamine. Finn also mentions this substance in the episode "The Real You." This is one of many references to hallucinogens within Adventure Time.
- The episode as a whole is a reference to the famous Tang Dynasty-era Chinese story The World Inside a Pillow by Shen Jiji. The story is a Taoist parable in which a man lives an entire life, with happy and sad periods, after entering a (Chinese-style porcelain) pillow given to him by a monk, before awakening back in his original life the morning after he entered it.
- Finn entering into the Pillow World through a door within his own house (the entrance to the pillow fort), living another life and growing old until returning to his former self after finally leaving is similar to the Pevensie children in C.S. Lewis' The Lion, the Witch and the Wardrobe.
- The premise of the story, an adventurer/explorer-like person dreaming or living out another, more familial life is similar to the Star Trek: The Next Generation episode "The Inner Light" (which may well itself have been inspired by "The World Inside a Pillow"). The connection is further indicated by the casting of Jonathan Frakes, who starred as Commander William T. Riker in that series, as the voice of the older Finn. A stark difference, however, between the two episodes is that Captain Picard retains his memories of the alternate life - even learning to play the flute thanks to it; In Puhoy Finn forgets completely, similar to the way one forgets a dream shortly after waking up.
- The Pillownomicon is likely a reference to the Necronomicon, the fictional grimoire that appeared in the stories written by horror writer H. P. Lovecraft and various films such as The Evil Dead.
- The little door that serves as the entrance of Pillow World is very similar to the little door of Lewis Carroll's Alice in Wonderland.
- The path that leads to Pillow World looks like the path to Other World from the film Coraline.
- When Finn tumbles into the pillow world, it is similar to a scene from the film My Neighbor Totoro.
- When Finn exits the pillow fort, forgets about his dream, and continues normally, it is similar to the book Dragon Blood: Pirates when Owen and Al exit the pirate world, believing it was their imaginations and continue normally.
- Also, the sound where Finn woke up and exits the pillow fort is similar to the Windows XP shutdown theme.
- Adult Finn uses the phrase "Alphanumeric!" which is likely a reference to the show Reboot, where the phrase is used by Enzo Matrix, who also grows up to an adult in another world.
- When Finn is entering into the Pillow World he says "man, this looks smaller from the outside" which is probably a reference to the show Doctor Who.
- A knife storm is shown at the beginning of the episode, like the one from "Rainy Day Daydream."
- CMO from "Be More" debuts in this episode, appearing as a brief "blink-and-miss" cameo when Jake dumps a pile of pillows on Finn and hits BMO in the head.
- Finn appears to have a pillow-like robotic arm replacing his right arm. He previously envisioned himself with a robotic arm in "Mortal Folly," "Who Would Win," and "King Worm." Farmworld Finn's right arm is also robotic. Likewise, in "Wizard" his right arm is transformed into a sword.
- BMO has his '#1 MO' cup from "Video Makers."
- Jake's favorite mug is the same one he uses to make tea in "The Jiggler."
- The music playing when Finn and Roselinen are about to dance is an instrumental of Ice King's "Let Me Show You Something Special" song from the episode "Princess Monster Wife."
- Shortly after waking up, Finn has forgotten about his Pillow World dream. However, two episodes later in "Princess Potluck," he exclaims "Puhoy!" when the Ice King attacks.
- At the age where Finn first meets Rasheeta, Finn notably resembles his father, Martin, whose appearance was revealed in "Escape from the Citadel."
- During the final scene in the Pillow-world, Jay's wife switches placement around the bed, first next to Jay, then next to Roselinen.
- When Jake is fishing for his mug the flower on it changed to the other side. Also, the hole in the window and the window have changed.
- The flower also changes sides later (two times) in the episode, when Finn comes out of the pillow fort.
- Finn's sword hilt changes when he is at the party.
- During the scenes Finn is chopping wool, at some point he is not wearing the sheath.
- CMO was originally from a cancelled episode that would take place in BMO's backstory.
- Steve Wolfhard based adult Finn on Howard Keel's character from Seven Brides for Seven Brothers.
- This episode is one of only two episodes to have won an Emmy award, the other being "Wizards Only, Fools."