New head teacher Karen Fisher is determined to make her mark on the school. Her first challenge comes in the form of the Kirbys, who have been homeschooled by their father. Meanwhile, Chris is shocked to discover that a girl he met in a club is one of his new students - and his boss's daughter. An attractive new Spanish teacher makes an impression on Tom and the rest of the staff and students.
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Karen's son, Harry, suspects that her husband is having an affair. Jess is jealous of Chris's relationship with her mother and the events of the day also take their toll on Harry. Despite her suspension for being truant, Tom tells Karen that Sam should be reinstated. Meanwhile, unable to get pregnant, Ruby considers artificial insemination and adoption with John.
Waterloo Road begins offering a sexual health service. Ronan wants his girlfriend, Sarah, to ask for the "morning after" pill. Jess's promiscuous behavior has resulted in her, once again, needing emergency contraception. Meanwhile, Lauren wants to date Josh but he seems more interested in Finn. Karen and Charlie discuss his affair and Janeece admits to Tom that she doesn't want her baby.
Lauren tries vainly to advance her relationship with the reluctant Josh but things are complicated further when Josh tries to kiss Finn. Meanwhile, the Fishers perform their annual celebration of the missing Bex's birthday and upon learning that Ruby is infertile and having trouble finding a surrogate mother, Janeece offers to give Ruby and John her baby when it's born.
Marcus has been hired to teach geography at Waterloo Road and he is brimming with ideas on how to improve parent-teacher relations. Despite Josh's assurances that he can handle the bullying, Tom persuades Josh to take self-defense classes. Vicki moves in with Jess and Karen and having agreed that Janeece will give her baby to Ruby, the two argue over their respective unhealthy lifestyles.
As part of Cesca's drug-awareness class, Sam proposes a project that doesn't go to plan. Meanwhile, Grantly becomes increasingly exhausted and after Fleur stumbles into school in her nightgown, he admits that she is unwell. Ruby, questioning the spark in her own marriage, decides to take matters into her own hands. As the bullying of Harry escalates, Ruth gets into a fight on his behalf.
Finn continues to bully Harry and Karen learns the extent of her son's victimization. Ruth gets a taste of popularity as she dominates a school debating contest. Ronan also enters, only for it to backfire. Meanwhile, Janeece goes into labor at school and is rushed to hospital. Karen initiates divorce proceedings and Vicki, feeling awkward living with the Fishers, moves out.
As Vicki struggles to balance her life, her situation worsens and she finally turns to Jess and Chris for help. Meanwhile, Grantly's home life is affecting his work at school. Karen and Charlie overcompensate by smothering Harry with attention. Jess is confused by Jonah's refusal to have sex with her and Janeece begins to regret giving her baby to Ruby and John.
After Chris installs closed-circuit television cameras, Jonah and Ronan secretly plant a webcam in the staff room. Janeece can't stand seeing her baby being cared for by Ruby and when she refuses to give the child back, Janeece kidnaps her from the school nursery. As Grantly unravels under the stress of Fleur's dementia, Steph convinces him that he must seek professional help.
On the last day of the term, Ruby arranges a fund-raising day to help local charities but Grantly is preoccupied. Ruby and Steph worry that he is planning something extreme. Meanwhile, a mysterious figure has been spying on Karen. Jess discovers it's her missing sister, Bex. Jess begs Bex to stay, but Bex thinks the family has moved on without her.
Karen kicks off the new term at Waterloo Road with an initiative proposing separate classes for boys and girls. While most of the boys' lessons descend into chaos, confident Janeece is assigned to Ruby as a teaching assistant. New student Kyle Stack causes problems the moment he steps in the door, with trouble erupting between Bex and Kyle on her first day back at school.
Against advice, Janeece gets involved in the life of student and single mother, Billie Taylor. Meanwhile, Ruby breaks into Grantly's home to clean. Tom persuades Kyle to try out for the soccer team and Finn feels left out as Josh and Nate grow closer. Cesca offers Spanish classes, only for it to lead to mutual attraction with a student.
Nate's uncomfortable relationship with his homophobic father, Matthew, hits rock bottom. Meanwhile, Hodge shows up at school and threatens to reveal all to Bex's family. Cesca tries to deny her burgeoning relationship with Jonah but they become involved after her disastrous date with Tom. Grantly and Ruby swap books and Janeece begins teaching secretarial classes.
Intelligent 16-year-old student Martin Dowlin seeks the approval of his dogmatic right-wing father. Inadvertently, he sparks a battle against prejudice. Meanwhile, Cesca gives in and sleeps with Jonah. Janeece finds out that Ronan stole a test and Grantly and Ruby continue their cultural adventures. Hodge shows up while Bex and Jess are shopping.
After Karen punishes Harry for his falling grades, he steals her cell phone and wreaks havoc. Meanwhile, Sam returns to school and despite Josh and Karen fearing that it's too soon, Tom insists on teaching. Cesca and Jonah's secret affair is halted and Janeece thinks Grantly has a crush on Ruby. Hodge hides his identity from Jess, who is fast falling under his spell.
Student Wayne Bodley is shocked to stumble upon pornography featuring Bex. Tom's recovery is tested, as he struggles to get to the bottom of Wayne's attitude. Meanwhile, Bex discovers that her sister's new boyfriend, who calls himself Ewan, is actually Hodge. Jonah gives Cesca an ultimatum and Finn is intent on being a good mentor to Denzil, counteracting Sam's assumptions.
All of the students are excited about Finn and Ronan's planned party. However, they alienate Sam and Vicki by bragging to their friends about how many girls will be there. Cesca discovers she's pregnant and Bex finally stands up to Hodge. Meanwhile, the party is interrupted by a gang of thugs, resulting in mayhem.
The whole school is abuzz with excitement over the upcoming fashion show. With noble intentions, Dan takes Vicki to his modeling office but she misreads the situation. Meanwhile, Grantly and Ruby's relationship deepens as they decide to work on a novel together. Jonah makes a last-ditch attempt to dissuade Cesca from getting an abortion.
Pretending that she needs to return to Spain, Cesca resigns. However, before she and Jonah can finally go public with their relationship, all is revealed for them. Meanwhile, Adanna's idea to unite the sexes, a pantomime called Cinderfella, proves popular. Denzil continues to engage in dangerous stunts and Grantly infuriates Ruby by rewriting her entire book.
On the day of the Waterloo Road pantomime, Kyle and Finn fight over the lead role. Denzil attempts to walk along the edge of a 20-foot-high railway bridge and it ends in disaster. Meanwhile, Ruby quits teaching for a new literary career. Jonah sneaks off to meet Cesca for a secret wedding but the day doesn't go to plan. Karen vows to stay at Waterloo Road.