Voted the most beautiful senior at West Beverly, Kelly fears that no one's looking beneath her good surface, while she becomes hurt over Dylan not wanting to show her his finished editorial whom he shows to Andrea first. Meanwhile, Steve forgets he's dateless when he goes out with Brandon and his parents to a Lakers basketball game and is randomly chosen to win $10,000 for a half-court shot. Also, Brenda reconsiders her college choice of going back to Minnesota.

The Gang plans to go to Magic Mountain for Senior Ditch Day but plans change for Brandon, Dylan, and Steve when a Burt Reynolds fan club eats at The Peach Pit when Nat is sick. Everyone else heads to Magic Mountain.

Brenda and Brandon are dateless for the Senior Prom. A school announcement is made that any student caught at Senior Prom drinking, intoxicated or with illicit drugs will be suspended from school and prevented from graduating. Footballer Tony Miller asks Brenda to prom on the day of the event, and Andrea asks Brandon at the last moment after her date, Jordan Bonner, gets ill. Steve takes Celeste Lundey, while Dylan naturally goes with Kelly. Donna doesn't eat all day so that she will fit into her prom dress. She is hit harder by pre-prom champagne than the rest of the gang, appears to be drunk at prom, and ends up collapsing in front of Mrs Teasley.

Following a little advice from Gil Meyers, Brandon and the rest of Donna's friends join forces to help her in a major school protest when she is suspended from school and is threatened with not graduating for getting drunk on Senior Prom night.

On the day of graduation, the gang thinks back about their most memorable moments from the past three years. Andrea delivers her commencement address and everyone celebrates. Dylan also has a mysterious encounter with his late father who advises him that he doesn't need to go to college to prove himself. Dylan instead asks Kelly to take a trip through Europe with him for the summer. Steve also decides to go to California University to be near his friends, while Brenda decides to to back to college in Minnesota. The night of graduation, they all meet in the Hollywood Hills near the big Hollywood sign to create their logo on the sign for the whole city to see to remember them for the years they had at West Beverly High School.

Brenda returns to Beverly Hills to find her bedroom taken over by Brandon and her parents angry that she dropped out. College registration is too much for Dylan who has a kindred spirit, so he and Brenda pair for a fishing trip to talk about their future. David and Donna try to audition for the DJ's on the California University's radio show, while Andrea tries to get in with the university's newspaper, The Condor, and soon clashes with the egotistical student editor Josh Richland. But Andrea has a more friendly meeting of minds with Dan Ruben, her dorm faculty advisor. Meanwhile, Steve tries to get Brandon in on the fraternity life on the CU campus by pledging the Kappa Epsilon Gamma (K.E.G.) fraternity.

During Rush Week, the girls attempt to pledge the Alpha Omega sorority and the result bores Brenda; reunites Kelly with an old flame, John Sears, whom she can't stand and shake off; exhausts Donna who tries to boost ratings for her and David's radio show; and stereotypes Andrea when she suspects the sorority president of being anti-Semetic. Meanwhile, Brandon is asked to run for student senate, but Steve won't accept his involvement with the senates politics which are unpopular with the fraternity.

During the first week of classes as California University, Donna becomes burned out of her work which is interfering with her college courses, Donna quits the late-night radio shift leaving David solo. Brenda seeks a job for herself to pay for her college tuition and finds one with her father, but she fails to deliver some important contracts. At a pool party for the college freshmen, Steve decides, but can't bring himself, to break up with Celeste. A jealous Dylan can't deter John Sears from seeing Kelly. Also, Andrea discovers that her residential advisor and admirer, Dan Rubin, is her English professor.