At the same time, Danny Zuko, leader of the Burger Palace Boys (Roger, Doody, Sonny, and Kenickie), brags about his love conquest (Summer Nights). Sandy and Danny bump into each other, and while Sandy is happy to find her summer love again, Danny blows her off under the guise of being too cool.
When lunch hour ends, rock star wannabe Doody gives an impromptu concert in the hall (Those Magic Changes), making it clear that grades and SAT scores aren't nearly as important as learning to play the guitar. Boys rank even more highly than songs on the Pink Ladies' charts, which is evident at Marty's pajama party, where the girls experiment with cheap wine, cigarettes and pierced ears, and Marty tells about her long-distance courtship with a Marine (Freddy, My Love).
Meanwhile, the Burger Palace Boys are busy drinking cheap beer and daydreaming about easy girls and cool cars (Greased Lightnin'). Sandy is still hurt by Danny's brush off, but when they get a minute alone together Danny tries to explain. Head cheerleader Patty Simcox interrupts to prompt Sandy to join the squad and to tease Danny about his latest indiscretions.
The kids take their newfangled portable radios for a rock and roll picnic in the park and plan how they'll pair off at the upcoming school dance (Mooning). Sandy passes through with valedictorian-to-be (i.e. school nerd) Eugene; she seems to have given up on Danny since she's found out that he has been telling his friends that she's "easy," which is not what a nice girl who almost went to Immaculata likes to have said about her. Rizzo teases Danny for falling for a girl who resembles the excessively proper teenage ingénue, Sandra Dee (Look at Me, I'm Sandra Dee). Act I ends with almost all the couples having some sort of fight with each other, even as they proclaim We Go Together.
A few days later at the Burger Palace after school, a couple of the guys run into Frenchy who flunked out of Rydell and is now studying cosmetology (Beauty School Dropout). Danny, who has taken up track in order to win back Sandy's affections, doesn't know that the guys have been challenged to a rumble by Cha-Cha's friends. He's more concerned about patching things up with Sandy at the Twi-Light Drive In, but he moves too fast for her and she leaves (All Alone at a Drive-In Movie).
The "greasers" are having a party, as Doody and Kenickie sing Rock and Roll Party Queen. Rizzo is worried that she's pregnant, but she's so mad at Kenickie that she tells him he's not the father. The other kids are sympathetic, but Rizzo rejects their offers of help, especially Sandy's (There Are Worse Things I Could Do). Sandy wonders what she needs to do to fit in at Rydell (Look at Me, I'm Sandra Dee Reprise).
The next time Sandy meets up with the Burger Palace Boys and the Pink Ladies, a transformation has taken place. Sandy is now a greaser's dream date, leaving Danny All Choked Up. Rizzo is relieved to learn that she isn't pregnant, and she and Kenickie reunite. It's happily-ever-after time for all (We Go Together Reprise).