Richie Cunningham's droom lijkt bijna uit te komen als hij wordt uitgenodigd omte babysitten met Mary Lou Milligan, een mooi meisje met een goede reputatie.

Beschaamd om met de gezinsauto te rijden overtuigt Richie zijn vader om hem samen met zijn vriend Potsie een tweedehands Jalopy te laten kopen. De twee naïeve tieners vertrouwen volledig op een gelikte tweedehands autohandelaar om hen een goede deal te geven.

Richie betaalt de prijs na een bierdrinkwedstrijd op het vrijgezellenfeest van de neef van Potsie.

Ritchie sluipt in het donker weg met Potsie Weber om te kijken naar Fonzie Ralph Malphs nieuwe, opgevoerde auto in een middernachtelijke dragrace tegen uitdager Skizzy Scollick.

Richie buys tickets to a rock and roll show from Fonzie but has to work at the hardware store when Howard needs to have his tonsils removed. Because he'll be working until 9:00 PM, he won't be able to go to the show, so he asks Fonzie for a refund. Later, Howard tells Richie that he can close the store at 5:00 PM leaving him free to go to the show. He, now, has to ask Fonzie for the tickets back.

Richie and Potsie, in their never-ending effort to get girls, decide that they want to join a gang called the Demons. However, in order to be accepted, they have to perform several dares.

Richie and Potsie obtain fake identification cards in order to attend a burlesque show where Ralph says Bubbles McCall takes it all off.

Richie and his girlfriend, Arlene, break up after two weeks of dating. Neither of them have dates for the prom, so they end up going together as friends.

To make some money, Richie, Potsie, Ralph, and Bag form a band. They secure a gig, but Richie and Potsie lose the money (including that of Ralph and Bag) playing poker.

Richie is put in an awkward situation when he is set up with a girl much taller than he is.

Meanwhile, Howard is frustrated by Marion's ineptness at playing bridge.

Cindy, a new girl in school, asks Richie to tutor her. Richie is interested in more than just studying and makes several attempts to win her over.

Richie meets a beatnik named Diedre at the movies and gets caught up in her type of lifestyle.

Howard's old army buddy, a black man, asks Howard to be the best man at his wedding. Howard and Marion consider holding the wedding at their home when the man can't find anyone else willing to do it.

Richie gets on the good side of a local gang, the Dukes, when he protects the leader's sister from being picked on. However, things change when the Dukes steal Potsie's bike, and Richie tries to get it back.

Howard wants to buy a bomb shelter to protect his family. Problems quickly arise when several of Richie's friends ask if they can use it.