Pacey and Joey return from their summer vacation on "True Love". Now they have to deal with Dawson's feelings, who has been deeply hurt for the past months. At first, he doesn't want to talk with neither one of them, but Jen convinces him to talk to Joey. Meanwhile, Pacey's older sister, Gretchen, arrives in Capeside and moves in with Doug, making Pacey homeless. But he won't live with his parents anymore, and so he asks Joey to let him crash at her house for a while. Dawson tells Jack about Gretchen, for whom he had a secret crush a few years ago. Andie meets 2 foreign guys, and she is attracted to them. Dawson and Joey talk, and he says he'll be ok, but it takes one day at a time. Everybody is wondering if Pacey and Joey did it while on the trip, and they don't confirm or deny. But Joey secretly tells Dawson nothing really happened.
Joey is looking for a new job and gets one at the Yatch Club pretending to know a very influent family. She is tricked by her boss's son, Drue, who discovers her lies. Mitch (no also a counselor at the school) tells Pacey he's not going to graduate unless he makes up for his bad grades. Pacey doesn't want Joey to know, but Mitch tells Dawson, who tells Joey, showing that he still cares about Pacey. Pacey and Joey have a fight, and Pacey admits he need help.
Pacey is happy for his good grades, and decides to sail for celebration. Dawson, Joey and Drue are assigned for a work and Joey can't go with him. Instead, Pacey takes Jen with him. What they didn't know is that a huge storm was coming, and suddenly they have to face it. Andie is having an interview with Drue's mom for college, but her medical records get in her way. Mrs. Valentine worries about Andie's mental stability and denies her the spot. When the storm get bigger, Andie takes control of the situation and guides everybody to rescue Jen and Pacey, who admit to each other their biggest regrets in life. Jen regrets never being in love, despite her feelings for Henry, and Pacey regrets the destruction of his friendship with Dawson. Dawson and Joey go on a small boat to rescue them, and Dawson saves Pacey's life. He apologizes to Dawson for all his attitude over the past months.
Everybody starts to think about their future, and how they are getting into college. Joey's concerned about Pacey not having grades good enough to get into college. Drue makes everybody think it's Jen's birthday so he can make a party. Andie takes over Jack's applications and drives him crazy with her obsession over it. Gretchen is applying for a job as bartender at Mrs. Leery's restaurant, and doesn't exactly tell what happened (or what will happen) with college.
Gale drops a bomb at Dawson saying that she might be pregnant. Joey seeks for advice with Joey, now that she has the feeling that sexual intimacy with Pacey is approaching. Jen tells her to go to the clinic as prevention. Jack is in an awkward situation when a girl is making moves on him, and he feels pressured to tell her he's gay.
Andie gets accepted into Harvard in advance, but accomplishing what should be the biggest thing in her life doesn't exactly makes her happy. She decides to explore different paths in her life by going to a rave. In the party, Drue gives Jen drugs, and she gives it to Andie. She tries ecstasy, which has a reaction with her anti-depressives and makes a disastrous combination, which almost leads her to death. Mitch and Gail decide to keep their baby, and things get awkward during the celebration when Gretchen brings Pacey and Joey with her.
Andie is recovering from her accident at the party. Jack blames Jen for the whole incident and is not talking to her anymore. Jen blames her life falling apart on Drue. Andie's dad tells her if it wouldn't be better if she went to spend the rest of the year in Italy with her aunt, since she already has the credits required to an early graduation. Andie decides to go and plans a goodbye dinner with the whole gang. She tells them how important life is, and the valuable time they might be wasting with useless fights between natural best friends. Jack and Jen get things straight, and Andie plays a little trick to bring Dawson and Pacey together
A boat with "Class of 2001" written in it is found in the school pool, and Mr. Leery and Principal Peskin are after the guys who did the prank. Dawson, Pacey, Jack and Drue are main suspects. The dog that was in the ship instantly recognized Jackl; Pacey has access to the yacht club and Dawson has access to the school keys. Each one of them come up with an alibi, leaving Drue as the only possible author of the prank. He gets suspended for 2 weeks and is put on probation for the rest of the year. After all, we see that Jack, Pacey and Dawson teamed up to put Drue in trouble.
Jack worries about Jen's failure to apply to college, he convinces Grams to help him, get Jen to change her mind. Dawson must rewrite his essay in his college submission, he comes up empty and turns to Brooks for help. Pacey accompanies Joey to a formal Worthington College students and he becomes center stage for the Dean. Gretchen convinces Dawson's parents to let her organize their annual party. Dawson bonds with Brooks, as he discovers more from Brook's past. Joey and Pacey enter the Leary resisdence, just as Dawson and Gretchen share a magical kiss under the mistletoe.
Bessie and Bodie take a vacation, leaving Joey in charge at the Bed & Breakfast. Between her duties at the B & B and Pacey, she has trouble finding time for herself. Moreover, she is trying to cope with her feelings about having seen Dawson kiss Gretchen, at the Leary's party. Pacey becomes convinced that Joey and Dawson need closure. Dawson's new project with Brooks begins to rejuvenate Dawson's interest in filmmaking. Jen takes Jack to a "Gay-Straight Coalition" meeting in the hopes that he'll meet some people in his position, she seems to get along with them better then Jack does.
The show opens with Dawson's confession to Pacey about his feelings for Gretchen. When the brother and sister go on a road trip to visit with her, he attempts to push her off Dawson's path. Pacey discovers that her boyfriend isn't the person he originally thought to be. Drue arranges to be "accidentally" locked in a storage room with Joey, in order to get out of a meeting with his father. In Capeside, Dawson worries that Grams is destined to lose another loved one sooner than she thinks, and contemplates telling her about Brooks' terminal illness. The conclusion of the show sees Gretchen and Dawson kissing, almost as invigorating as his first kiss with Joey at the end of season one.
Joey and Pacey's parent's organize a celebration for Pacey's 18th birthday. The party quickly becomes a dismal failure ranging from taunting Pacey, to Joey and Pacey stumbling on Dawson and Gretchen making out. Pacey reveils the secret to his bitterness, Dawson and Gretchen workout a problem faced in their new relationship. Finishing up her community dues, Jen is paired with Tobey, after an interesting night she discovers Tobey's feelings for Jack.
Joey and Pacey are forced to spend the evening with Drue and a prestigious girl. In order to make sure that Drue is on his best behavior. Dawson and Gretchen go out on the town with her friends only to reveal the large gap in age between the two. Tobey extends an invitation to Jack to become more then friends. Brooks' condition worsens.
Dawson stays behind to look after Mr. Brooks who lies on his death bed, while, the rest of the gang embarks on the senior ski trip. Dawson is faced with making a life or death decision. Jack and Jen do something that might have an impact on their friendship. While Pacey and Joey eventually make a decision that will have implications for shows to come.
The morning after, Joey and Pacey discover they've overslept and missed the bus back to Capeside. While they wait for the next one, the couple find themselves confronted with the tensions that accompany the latest development of their relationship. Meanwhile, as punishment for breaking into her hotel mini-bar during the class ski trip, Mr. Kasdan decides to send Jen to a psychologist where she can discuss her "inner teen issues." Back in Capeside, Joey and Dawson's paths collide and they spend an evening catching up on the past weekend and its many happenings. Sensing a change in Joey's demeanor, he poses the unthinkable question, forcing Joey to consider whether honesty is the best policy.
The results of the Senior Polls have ramifications for Dawson, Joey, and Pacey, as the three try to ignore the tauntings of pollmaster Drue Valentine. While Pacey and Joey try to eke out some time alone together, Dawson finds his night alone with Gretchen more awkward than he'd expected. Meanwhile, Jack's suspicious when Jen drags him on some mysterious errands, and his suspicions are confirmed when he realizes just what she's up to.
Joey receives some good college news. But while Joey glows, Dawson is forced to face a crushing rejection. Joey's elated mood, however, is tempered by a sobering realization...until Dawson proposes a surprising solution. Meanwhile, Jen and Jack have nothing but options when it comes to college. While Jack's convinced that New York is the place to go, Jen isn't so sure she's ready to return to the Big Apple. A therapy session forces Jen to confront her past.
As Senior Ditch Day arrives, Joey is excited to find herself accompanying Jen on an excursion to New York under the auspices of attending a college meeting. But it's not long before Joey realizes that they're there for an entirely different reason. Meanwhile, eager to infuse their relationship with a bit of spontaneity, Gretchen and Dawson take off on a road trip... But what starts out as unpredictable fun turns into one debacle after another. Back in Capeside, Pacey and Drue find themselves the only seniors in school on Ditch Day. Having had enough, they set out for some real fun, Drue style, leaving Pacey in serious doubt as to what his future will hold for him.
As Gale's delivery date approaches, the girls throw a baby shower for her...but it's an experience that throws Joey for a loop when she realizes it's possible that she could be pregnant, and Pacey is nowhere to be found. While Dawson awaits the arrival of his new sibling, Dawson and Gretchen wonder what their future holds when Gretchen considers an out-of-town job... Meanwhile, Jack faces an unexpected situation when he learns that Tobey falls victim to a vicious crime.
As everyone gets ready for this year's senior prom, some bad news gives causes Gretchen to reflect on her life, and Joey worries about Pacey's odd behavior. Meanwhile, Jen and Jack meddle in each others' lives... resulting in some interesting prom dates. At the prom Joey and Pacey confront once unspoken issues, and the festivities cause conflict for Gretchen, as she questions her relationship with Dawson, while an unhappy Jen is rescued by an unlikely individual.
As the school year draws to a close, changes abound for the class of 2001. While Joey and Dawson deal with their respective break-ups, Jen makes a startling decision about her future. In his own way, Jack helps Jen to rethink it. Meanwhile, Dawson has his own decision to make with regards to Gretchen when an unusual opportunity comes their way. And when Mr. Kubelik from Worthington asks Joey to bring Pacey with her to a party for incoming freshman, which fills the pair with hope that they might be able to have a future together after all.