A local business owner organizes a shark derby but the event quickly spirals out of control and leads Jill to run into the water to save a little boy but then is attacked by the shark. She is saved by Mitch but later dies from a blood embolism.

Harvey is feeding off the local panic, making a small fortune selling ""Creature in the bay"" T-shirts. Just when things start to calm down, the situation escalates when a fishing boat catches something huge in its net, and is pulled underwater by the mysterious entity below the surface.

Eddie's life is torn apart by the accusation of statutory rape from the overprotective father of a lonely teenager trying to make friends lied to a group of other teenage girls about her encounter with Eddie. Mitch deals with the anger of a paraplegic former lifeguard.

Toxic waste, corporate greed, and a determined environmental spell trouble for the Baywatch lifeguards.

Mitch receives news of his uncle's death. He recruits Hobie, Eddie and Shauni to trek to northern California's rugged gold country where he learns his uncle may have found the golden boot. Eddie and Shauni are having problems in their relationship when Eddie is accepted into a year-long lifeguard exchange program in Australia.

Drew shoots at the raft. Shauni is taken hostage, and pushed off the cliff. After Eddie and Mitch save her, she finds out that she's not pregnant. Eddie proposes to her. Mitch climbs down with the help of a rope and finds the golden boot; Jed arrives at the trailer. Eddie marries Shauni and they move to Australia.