Encountered as a white mouse residing in the Magic Tree House during Jack and Annie's fifth adventure, Peanuts replaces the absent Morgan le Fay. This small rodent actively aids the siblings across their fifth through eighth quests, subtly guiding their missions. Peanuts' true nature is Morgan le Fay herself, transformed by a curse Merlin cast as a magical prank. The rodent enchantment lasts through multiple adventures until Jack and Annie break it at the end of the eighth book, restoring Morgan.

The anime film elaborates on this transformation, depicting Merlin's initial curse as a jest. Its conclusion shows Morgan retaliating by transforming Merlin into a mouse, leading to new missions for Jack and Annie to undo this spell. In every appearance, whether as mouse or human, the character consistently offers benevolent support to the children. The mouse form specifically allows covert help during time-traveling adventures when Morgan's direct presence faces magical restrictions.