It's Living History Week at Waterloo Road and the whole school is in high spirits but it's not long before the day takes a turn for the worse when three pupils take seriously ill. Simon and Sue up the ante in their campaign against Christine and Kevin woos Dynasty back into his arms.
Waterloo Road Comprehensive is on the scrap heap. It can be found very near the bottom of every league table there is. Its despondent teachers have given up trying to make a difference as they struggle to cope with their own personal problems as well as their nightmare day jobs. When the current Headmaster has a nervous breakdown, Jack Rimmer is reluctantly thrown into the hot seat. He recruits optimistic, educational zealot Andrew Treneman who wants to give up his comfortable private school job to bring the benefits of his elite educational experience to Waterloo Road.
Together with feisty Guidance Head Kim Campbell the three teachers - all committed in their very different ways - set to turn round Waterloo Road, painful step by painful step. Meanwhile English teacher Tom Clarkson's life is in a mess. He's about to be married to live-in girlfriend and fellow teacher Lorna Dickey and can't face telling her he is no longer in love. But much worse, he has fallen for Lorna's closest friend - drama teacher Izzie Redpath.
Man-eating French teacher Steph Haydock is delighted Jack Rimmer has been promoted - she's always fancied him but now he's headmaster, his powerful, manly charms are impossible to resist.