It's the last day of junior year, and the East High gang can't wait to get the summer started (Countdown / What Time Is It). Things have been smooth sailing for Troy and Gabriella since their star turn in Juliet and Romeo, but Sharpay vows to win Troy's heart this summer - by any means necessary. With all of the Wildcats desperate for cash, Troy gets a surprise phone call that work has arrived (What Time Is It - Reprise)! At the Lava Springs Country Club, owned by the Evans family, Sharpay revels in her summer kingdom, surrounded by the club staff and her adoring "Sharpettes" (Fabulous). The celebration is cut short when not only Troy, but the entire Wildcats gang, shows up for duty! Mr. Fulton, the assistant club manager, assigns them jobs, starting with cleaning up the kitchen (Work This Out). Enjoying a picnic lunch on the golf course, Troy confesses his fear of the future to Gabriella, who for once just wants to have some summer fun. Ryan and Sharpay spy on them, and Sharpay tries to sabotage the couple's fun with sprinklers. In the dining room on her break, Kelsi plays a song she wrote for Troy and Gabriella (You Are the Music in Me) and gets Troy and the Wildcats to promise to sing it in the talent show. Troy and Chad head off to caddy for Sharpay and Ryan on the golf course, where Sharpay dangles a "college scholarship" carrot in front of Troy (her dad is on the influential alumni committee). After the 18 holes, Fulton informs Troy that he's been promoted to junior golf pro, which comes with honorary membership status and an extreme makeover (Fabulous - Troy's Transformation). During the commotion Sharpay coerces Troy to promise to sing with her. Later that night, as Ryan and Sharpay rehearse for the talent show and the Wildcats await their turn (Humuhumunukunuku-apua'a), we discover that Sharpay has secretly plotted to replace Ryan with… Troy! Emotions explode, numbers are pulled from the talent show, and Troy is left torn between two promises (Act One Finale).

A few days later, Troy reluctantly rehearses Kelsi's revamped song with Sharpay and the Sharpettes (You Are the Music in Me - Rock Version). On the basketball court, Gabriella points out that in the midst of his new job and practices with the college basketball team, Troy has begun to neglect his friends. At the staff baseball game, the Wildcats are missing their team leader, but Gabriella has recruited a new ninth man - Ryan. The dubious Chad challenges "dancer boy" Ryan, who not only gets Chad to dance, but helps the Wildcats win the game (I Don't Dance). Now officially part of the team, Ryan teaches the gang a new number for the talent show (Every Day - Rehearsal). Sharpay, feeling her Star Dazzle Award under siege, directs Fulton to yank the "staff" from the talent show, then basks in her victory (Fabulous - Sharpay's Triumph). This is the last straw for Gabriella, who confronts Sharpay, quits her job, and breaks up with Troy (Gotta Go My Own Way). The confused and heartbroken Troy faces all the voices in his head (Bet On It). Backstage at the Midsummer Night's Talent Show, Troy decides to set things straight. He gets his old job back from Fulton, tells Sharpay that as an employee he can't sing with her, and apologizes to the Wildcats. Finally seeing the error of her ways, Sharpay arranges for Gabriella to come back and sing with Troy (Every Day) and gives the Star Dazzle Award to Ryan and the Wildcats. Now reconciled, the entire company celebrates the real beginning of summer (All For One - Finale; High School Musical 2 Megamix - Bows)!