He is used as Squidward's replacement when Squidward refuses to play with SpongeBob.
Squidward is initially happy when Mini Squid "offers" to do his job, but he grows angry when Mini Squid succeeds in places Squidward had failed by doing exactly the same thing. For example, both Squidward and Mini Squid ask as a joke, "Who ordered the Krabby Patty, and who ordered the Krabby Patty?" but the customers think that it is only funny when Mini Squid says it. The customers laugh at Squidward when he dances but says that Mini Squid's dancing is good, even though Squidward did the same dance. Harold Bill Reginald Scott suggests that Squidward gets size reduction surgery so that he can dance more like Mini Squid, although his dance is exactly the same. This is because Mini Squidward was doing everything with a cheery attitude while Squidward was being a bad sport and trying to hog the spotlight.
Furious, Squidward attacks Mini Squid. Then, a talent scout visiting the Krusty Krab offers Mini Squid a job, which he takes. In the end, Squidward's puppet problems are not solved, as SpongeBob makes another puppet of himself.