Tim has to cast an entire festival of short plays. Penny, who has just returned to New York from Los Angeles, worries that she has become irrelevant. Penny serves as a reader for Tim during his auditions, where she re-connects with her long-time crush, Eric.

Linda asks Tim to cast a prestigious new play, Iron Dog, which will be running in Boston. Eric tells Penny about a new acting class he's taking, and Raina convinces Penny to attend. Tim and Steven, who recently broke up, unknowingly flirt with each other on a dating site. The acting class turns out to be ridiculous, and Penny and fellow student Aaron bond while making fun of it.

Penny participates in a reading for the musical Intersections, whose cast is led by Eric. While Penny is away, Tim calls Aaron as a substitute reader for Iron Dog. During the Intersections rehearsals, Penny is annoyed by the flirting between Eric and the female lead. The Intersections reading is disappointing.

Penny and Aaron both serve as readers for Tim for the Iron Dog auditions. Steven meets Cameron, who comes in to potentially get signed but reveals that he doesn't want to be an actor any longer, and Steven is smitten. Penny has a traumatic experience auditioning for experimental dance troupe "DaBoSeRoy".

Aaron helps Penny with her own planned audition for Iron Dog, and confesses that he is applying to law schools. Penny auditions for a touring production of a Mean Girls musical. Eric comes in for the Iron Dog audition, and Aaron, annoyed at and jealous of Eric, delivers a bravura performance reading opposite him. Linda decides that she wants Aaron to audition for the play. Penny becomes taken with Aaron and the two go out on a date, but Aaron doesn't tell her about his good news in order to spare her feelings.

Tim keeps the news about Aaron a secret from Penny. At a party for potential investors for Iron Dog, Linda meets Steven and his new boyfriend Cameron, and Steven reveals to Linda that Tim is gay. Penny auditions for Iron Dog. Penny finds out that Aaron was asked to audition, and was cast, and the two have a fight. Penny gets cast in the Mean Girls musical.

Tim has a new reader, Randall. Penny returns to New York after a harness malfunction during a performance of Mean Girls caused her to sprain her hip, forcing her to leave the tour, and she finds that the news of her injury has turned into a Broadway-wide rumor that she "broke her vagina". Linda tells Penny that Iron Dog was moved from Boston to New York, and that everyone in the cast and crew was replaced except Aaron.

Tim goes to the Berkshires to see a play he cast; he drives Penny there as well, so she can stay at Steven and Cameron's summer house. A leaky roof where Tim was staying forces him to also stay with Steven and Cameron.

Tim finds out about an opportunity to work with director Nolan Grigsby. Aaron gets signed with Steven's casting agency. Penny's mother and stepfather come to visit her. Penny's stepfather accompanies Penny to an audition for a musical, and ends up getting called to audition, then gets a callback, while Penny doesn't.

Penny decides that she will no longer date actors. Tim asks Penny to be his reader for a Civil War play because Randall is away on a tour. Nolan comes to New York, meets Tim, and sits in on the auditions. Penny, sexually frustrated, breaks her own rule by dating three actors. Nolan asks Tim to cast his new play. Penny auditions for a new musical, Piñata Party, where she runs into Aaron and finds out that he's now dating a Broadway star, Serena Maxwell.

Penny and Aaron end up at Steven's office at the same time, and Penny, in an effort to avoid Aaron, hides under the table. Penny and Randall meet Serena, who tells them she'll be starring in a new musical, Jeremy's Fort. Steven and Cameron attend the Iron Dog opening night in New York, which turns out to be a disaster due to the new director.

Iron Dog's New York opening night has received terrible reviews. Tim, Randall and Gail assist Nolan in auditions for his play, based on Nolan's "Compass-ition" theories. Penny and Raina go to an acting class where Serena is also present, and Serena is bereft due to the bad reviews. Penny and Tim attend an office promotion party for Steven, which Aaron also attends. Penny and Aaron, who realize neither one has seen the reviews yet, leave the party so they can finally read them.

Nolan continues with his unorthodox audition process. Tim, inspired by Nolan's physical prowess, invites Penny and Raina to a fitness class. Penny auditions to play Serena's crippled sister for Jeremy's Fort, and Penny's stiffness from the exercise helps her nail the part. Aaron tells Penny that Iron Dog is closing, and that he's still attracted to her. Nolan massages Tim due to Tim's own stiffness, and Tim discovers that there is romantic chemistry between the two.

Penny gets a callback for Jeremy's Fort, but is unsure whether to go or not, due to the love triangle that now exists between her, Aaron and Serena. Tim realizes that he is attracted to Nolan, but doesn't know whether to make his feelings known. Penny is convinced by her friends and family to attend the callbacks. Gail, aware of Tim's feelings, makes up a reason for Nolan to see Tim again before he is set to leave New York; Tim confesses his feelings, and Nolan reciprocates, although Nolan then has to leave. Penny gets cast in Jeremy's Fort. Penny goes to see Iron Dog on one of its last nights, and tells Aaron afterward that she is still attracted to him as well; the two kiss, but decide to keep any relationship on hold until the end of the run for Jeremy's Fort.

Randall leaves for a six-month job as a cruise ship entertainer. Jeremy's Fort rehearsals are awkward for Penny. Aaron decides to leave the city for a while to decide about his love life.

Raina leaves New York to film a TV pilot in Los Angeles. Tim and Gail struggle to find a replacement for Randall, eventually settling on Agnes. Penny finds out from Serena that Aaron has left the city. A video of the director of Jeremy's Fort insulting the theater's artistic director leaks onto the internet.

Aaron has decided to apply to law schools, which leaves Serena bereft. Tim gets a gift package from Nolan full of inexplicable items. After the director is fired from Jeremy's Fort, Linda Avery is hired to take his place.

An unexpected visit from Nolan leads both Tim and Nolan, and Steven and Cameron, to reassess their relationships. Penny unsuccessfully looks for a roommate. A "game night" at Serena's apartment turns awkward for Penny.

Penny has found new roommates. Penny and Aaron have a chance encounter. Gail saves Tim during a challenging meeting with Vincent Savio.

Gail has decided to become a real casting director, and Tim and Agnes put her through her paces. Serena invites Penny, the show's assistant director Josh, and Aaron to a "double date" at a piano bar to promote Jeremy's Fort, but the night ends on a sour note.

A month after their falling out, Serena and Penny remain not on speaking terms, though Jeremy's Fort is a success. Gail manages to steer Vincent Savio toward auditioning talented performers, despite his unorthodox requests. Penny and Aaron have a chance meeting, where Aaron delivers sad news.

The reading for Vincent Savio's musical, Light Me Up, leads to an unexpected reconciliation. Aaron crashes Steven and Cameron's engagement party to tell her something that will change both of their plans for the future.