With the possible sale of the Taylor house, Kelly gives her mother and prospective buyers a hard time. David and Donna plan to throw Kelly a surprise 18th Birthday party at the Peach Pit. But things take a unexpected turn when the guests get an even bigger surprise from Kelly when she collapses due to an overdose of diet pills. Meanwhile, Steve badgers Brandon into joining him on a TV dating game show and Steve wins a date with an attractive girl named Celeste Lundey.

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.

Steve invites Brandon to stay with him at a Malibu beach house, owned by one of his mother's industry connections. They throw a farewell party for Brenda before she leaves for college in Minnesota. Kelly returns from Europe, without Dylan, who has been rejected for acceptance into Berkeley. David seeks out affordable off-campus housing. Brandon has a surprise encounter at the beach house with Jill Fleming, daughter of the owner, who mistakes him for a burglar and threatens him with a can of mace. Andrea visits Gil Meyers and frets over her decision to stay in California for college instead of leaving for Yale.

Donna is afraid to tell her mother about David living with her and Kelly at their new beach front house. Kelly tells Donna about her troubles with Dylan during their stay in France with both trying to make each other jealous. Dylan returns from Europe to reconcile with Kelly who admits he was faithful to her. Meanwhile, Brandon tries to get close to Jill who wants to take things slow, and it unwittingly creates jealousy with Steve. In Minnesota, Brenda gets homesick for the warmth of Beverly Hills while trying to adjust to college life and her brash roommate Darla Hanson.

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.

Cindy and Jim throw a party for their 20th wedding anniversary. As Stuart and Brenda's affair grows, he proposes marriage and she willingly accepts. Meanwhile, Brandon falls for an anthropologist grad student named Lucinda Nicholson. A paranoid Dylan buys a gun from a street dealer and almost shoots Brandon. Andrea tells Kelly that she has doubts about her affair with Dan after he tells her about his non-belief in marriage; then Andrea meets Jesse Vasquez, a charming Latino barman, at the party. Mel asks David to look after baby Erin while he heads off to Mexico with his girlfriend.

After Steve breaks up with Laura, she tells Kelly and others that he date-raped her the night they were together to get back at him. Meanwhile, Kelly learns Sears true sexist colors and rejects him, but he too doesn't take it so kindly. Dylan tutors Brenda in poetry which brings them to a disagreement. Also, Brandon's relationship (or lack of it) with Lucinda takes a dangerous turn when D'Shawn finds out and threatens Brandon to take his history mid-term for him or he will tell Professor Randall of his suspicions. When Lucinda insists to Brandon that he should take D'Shawn's tests, Brandon reacts stressed and hits the road.

In the two-part season finale, Brandon goes to Washington D.C. as a part of the college task force to meet the president. Kelly follows Brandon to Washington to get him out of a jam when Clare and Lucinda arrive at the hotel to pursue him. At the CU Mardi Gras, David impresses pop star Kenneth "Babyface" Edmunds, and his recording manager Ariel with his keyboard music and Donna catches David in a very compromising position with Ariel. Steve runs into Celeste who's now with John Sears. Kevin and Suzanne get married in a semi-formal ceremony where he persuades Dylan to cut out any outside investment in their business offer. Jim becomes angry at Dylan for making such a rash move and Dylan fires Jim as his financial holder. Dylan then goes to a bank and gives Kevin full power-of-attorney control over his money, unaware that Kevin and Suzanne have had a hidden agenda for Dylan's inheritance all this time. After her major success in the CU play, Brenda gets a scholarship offer to study acting in London and she pays a visit to Dylan's place before leaving. Also, Andrea and Jesse experience the joys and fears of parenthood after their daughter is born.