Matt rescues a shady teenage girl, calling herself Rachel, who turns out to be a con artist hiding from her mentor and ex-partner in crime who as come after a diamond stuffed doll that is being shipped in from Hong Kong.
Stephanie goes to work with the Coast Guard to help crack an arms-smuggling ring in the area, and becomes attracted to a warrant officer, Scott Daniels, who tries to persuade her to overcome her fear of helicopters after she begins having nightmares of her father being killed in action in a helicopter crash in Vietnam over 25 years ago.
After all the beaches are closed down by Los Angeles budget commissioners looking to cut back on funding for the lifeguard squads of Baywatch. Mitch and the team organises a meeting on the beach with the three budget commissioners and some of the people rescued by the Baywatch lifeguards, they try to convince the city budget official not to stop funding for the lifeguards.
A country-western singer, named Jessie Lee Harris, arrives at Baywatch and after C.J. rescues him from a horde of his fans, he asks her to help him find his estranged wife and son living in the area. C.J.'s newest friend, Sadie, hopes to impress Jessie Lee at an amateur night at the local western club in hopes of wining a spot with his band.
After witnessing a rescue, a bumbling, ambitious TV producer, named Don Brand, decides to make a pilot movie, titled 'Rescue Bay', based on the life of the Baywatch team which results in chaos from everyone after observing their own "characters" in the show, including Garner's look-alike character, C.J. playing Stephanie's role, and Mitch caught in the middle of it all in playing himself.
Matt has a shot at cheaply buying a small yacht and insists Summer should chip and move in. Mitch falls instantly in love with strangely aloof and secretive Kate McCoy. Only after her sudden death is diagnosed poisoning he learns from his cop mate Garner that Kate was an undercover alias of D.C. investigative reporter Catherine Larsen, who found out about secret arms deals.
An attractive wild young woman, named Mattie, and her plain twin sister, Gwen, arrive at the beach and vie for Mitch's affections. But Mitch is unaware that Mattie and Gwen are the same person, a woman with split personalities which soon lands Mitch in danger when Gwen's other personality, Mattie, means him physical harm.
C.J. thinks about her future as she spends more time with Keith and helps to rescue a stranded dolphin. The ghost who haunts Summer's hotel room takes her to be the love of his life who betrayed him and plots to reenact the tragedy that drove him to suicide 50 years ago.
Stephanie, C.J., Matt and Summer take a weekend vacation to San Diego to demonstrate water rescue procedures while staying at the famed Hotel Del Coronado. Summer correctly begins to think that her hotel room is haunted, when she's a haunted by the ghost of a wealthy businessman who mistakes Summer for his lost love from a doomed love affair back in 1943.
Ben Edwards doesn't look forward to a lifeguard reunion of his friends, called the Red Knights, over his walking disability when the rest of them are still fit and active. During a night on the town, Mitch, Ben and the other lifeguard trigger a barroom brawl between the retired lifeguards and a old rival team.
Matt is surprised when his former motorcycle girlfriend Jesse, who is now an aspiring model, arrives to shoot a video for an wave-runner advertisement. At Jesse's urging, Matt helps her discourage the video director's advances towards her and he soon becomes the target for murder by the jealous director, while Summer is struck with jealousy herself after learning of the past Matt had with Jesse.
Olympic champion Mary Lou Retton comes to Baywatch to stage a Special Olympics competition for the mentally disabled. At Mary Lou's urging, Mitch takes under his wing a mentally disabled teen, named Darnell, who tries too hard at winning than on the ethics of the competition. Stephanie befriends Sammy, a shy young girl with Down syndrome who doesn't try at all to believe in herself.
While Mitch, Garner and the rest of the Baywatch team deals with a street gang that have been hanging around at the beach and harassing swimmers, Stephanie falls for Carlos, the new lifeguard trying to get away from the gang he was once in and tries to rescue his sister from the gang's leader.
Mitch tries to show he can still compete with younger men by taking part in the Ironman competition; Matt's late hours make Summer suspicious. Standing in for a tired Matt, Summer Quinn is knocked unconscious attempting a rescue.
Mitch must make a difficult decision when he must choose which boy to rescue from the ocean, and the boy he does not save first ends up in a coma.
Stephanie's sister, Caroline, arrives at Baywatch with exciting news, but her joy is shattered by a cataclysmic event. Mitch finds himself at the mercy of a wounded but dangerous adversary.
Matt and Slade compete for Summer's affections by surfing. Mitch encounters a desperate woman who needs help for her boyfriend.
Matt and Slade have a confrontation on the waves over Summer and decide to have a huge bungee-jumping contest; Garner and Mitch chase pickpockets.
Cort returns to Baywatch, but C.J. is worried there is something wrong with his eyes as evidenced when he bungles a simple rescue by bumping into many beach goers. A beach side attraction where a very tall man works as a "feral man" scares customers is seen by Hobie, who finds the man is a depressed immigrant with no family. Hobie befriends the man, but when he falls in the water by accident his extra large size is a challenge for the Baywatch crew.
Hobie falls in love with a girl in junior lifeguards; Mitch and Jackie have a number of interrupted dates; Matt and Summer discover that they love each other. Thinking he is romantic, Hobie takes the girl on jet ski to a cove near a seaside monastery to kiss her as the bells toll, but they get caught in a dangerous current.
Hobie, Gayle, and Ken get rescued from the crashed plane; Matt's father takes back Matt's motorcycle; Jackie has problems with the renovation of her Summer Place.
Hobie, a cold-hearted Gayle and Ken, Gayle's fiance, get trapped inside Ken's plane when it crashes in the ocean.
