Serena and Dan finally accept that they are crazy about each other, despite that they come from polar opposite worlds. Chuck thinks of investing in a club trying to make his father Bart Bass proud of him. Nate confronts his father, about the drugs he found in his house but he denies having a problem. Jenny discovers a secret that her parents have been keeping from her. Finally, Blair is devastated by Nate's actions when Jenny reveals that Nate kissed her by accident thinking she was Serena.

Serena, Blair, Nate, Chuck and their class break into the school swimming pool for a night of fun, but when someone nearly dies, the school threatens to expel the person responsible for the break-in. Everyone agrees to not say anything, but this creates major problems between Serena and Dan. Vanessa, while working on a documentary project about private schools, accidentally captures Blair and Chuck discussing their affair. Lily tries to tell Rufus how she really feels about him.

After Georgina reveals the true reason Serena left Manhattan, Serena goes back into her old habits. Her friends Blair, Nate, and Chuck, in order to help her, have to put their differences aside. Meanwhile, Rufus is excited when his band is invited to perform at a Rolling Stone-sponsored concert, but Lily is the last person on earth he expects to see at the performance, especially since her wedding rehearsal dinner is the same night.

Vanessa uses the scandalous picture of Catherine and Marcus to blackmail Blair into being a nicer person, so Blair seeks revenge by enticing Chuck to seduce Vanessa. Lily and Bart throw an extravagant housewarming party and expect their children to make them proud in front of the attending press, but a rebellious Serena isn't ready to play by their rules. Meanwhile, Dan and Jenny discover a big secret that Nate has been keeping from his friends.

Because Chuck is MIA since his father's funeral, his Uncle Jack arrives on the Upper East Side to find and help him. Trying to forget her last conversation with Chuck, Blair focuses on being accepted into the most prestigious ladies club in the city, Colony Club. Jenny returns to Constance Billard and immediately takes on Penelope and her posse of mean girls, but no one is going down without a valiant Gossip Girl-worthy fight.

Hoping to impress the elitist theater kids at NYU, Blair sets her sights on landing a private concert with the hottest musical performer of the year, Lady Gaga. Dan and Olivia sign up to write and star in a school play, based on an idea by Blair and directed by Vanessa. With Blair out of the picture, Serena turns to Nate to help her get through a difficult situation. As a favor to Chuck, Jenny agrees to hang out with Damien, the son of an ambassador who is staying at Chuck's hotel, but the experience proves to be a lot more intriguing than she expected.

Nate and Serena decide to explore the boundaries of their friendship. Blair suspects that Chuck is having problems forgetting about the woman he saw at his father’s grave. Jenny agrees to accompany Damien to a State Dinner but is unaware that he needs her help with a drug exchange. Vanessa and Dan attempt to move past the awkwardness of Dan’s confession of love. Rufus returns from a ski trip and tries his best to avoid Lily.