A new term at Waterloo Road gets off to a noisy start when Karen arrives to discover the alarm going off and her new site manager, Rob Scotcher, taking a laid-back approach to the problem. Rob is accompanied to the school by his son, Aiden, who immediately catches the eye of Jess. However, it seems she's not the only one interested in him. When a Year 12 pupil abandons and then claims her baby, Karen is concerned for the girl, her child and the dark secret she's keeping. New teachers Eleanor Chaudry and Daniel Chalk want to make a good impression, but the kids aren't going to give them an easy ride. "Chalky" is instantly marked out as a soft target, while Ms Chaudry's strict rules land Sambuca Kelly in the "cooler". What Eleanor sees as unruly behaviour in Sambuca is just a personality clash according to Tom, but her erratic behaviour gives cause for concern.

When new girl Evie Prior arrives at Waterloo Road, something about her story doesn't quite add up. It is not long before she is upsetting her classmates and causing problems for Karen. Evie tries to empathise with Finn, who's devastated by girlfriend Sambuca's terminal illness. But when Evie's story unravels and the truth is revealed, the school is forced to deal with the fallout. Meanwhile, it is appraisal time for the overconfident Eleanor and the nervous Daniel Chalk. Karen sits in on their classes and finds room for improvement for both teachers. But has she got it in for Ms Chaudry? After school, Karen and Rob go on a date, with a happy outcome overshadowed dramatically by the return of Rob's ex-wife.

Sambuca is keen to find the father she's never known before she dies, and secretly enlists the help of Lauren and Finn travels to Blackpool. But when she most needs someone to rely on, will Sam be disappointed? After a run of bad publicity, Karen is keen to promote a positive image of Waterloo Road and hires PR woman Linda Wickes to put a positive spin on things. Will Karen recognise her school after Linda's given it a makeover? And when Richard Whitman, the Director of Education, arrives unannounced, he makes no secret of his disapproval of both the PR launch and Karen's professionalism.

Exam fever hits the sixth form and, with Richard Whitman on a personal vendetta to close Waterloo Road, there's a lot riding on the exams going well. But things do not get off to a smooth start: Vicki's got more than exam nerves to deal with – she's discovered she's pregnant with Aiden's child. But his solution to Vicki's dilemma causes more problems than it solves, as Ronan takes the blame for their rash actions. It is the day of Sambuca's memorial service and everyone's on edge. As Finn empties Sam's locker Lauren and Amy help him to appreciate the sentimental value of the little things that are left behind. At the memorial service Denzil struggles with his grief, especially when new girl Scout inadvertently steals Sam's jumper, while Jess makes her own shock admission.

The whole school gears up to face an independent inspection. But when the lead inspector discovers that Chris has allowed a pupil to spend the night at his house, it is Karen's job that's on the line. As the staff do their best to rally round, Jess issues Eleanor with an ultimatum: if she really wants to save Waterloo Road, she needs to take action. With Scout and her brother Liam's mum still missing they face being taken into care. Scout takes matters into her own hands and decides to run away. But with the police, Chris and a drug dealer in pursuit, it is not going to be easy. Karen is fired and she leaves Waterloo Road with children Harry Fisher and Jess Fisher. Chris Mead also leaves and Aiden and Rob Scotcher leave, but at the end Jess lets Aiden become part of their child's life and they leave to pursue a relationship together

New headmaster Michael Byrne arrives at Waterloo Road with big ambitions to improve the school, bringing with him a team of high-achieving teachers including newly-weds Jez and Sian Diamond and former Waterloo Road teacher Matt Wilding. Left scarred by a pupil's knife attack at his last school, the new head is called to court to hear the verdict of the trial. Elsewhere, Phoenix and Harley Taylor struggle to hide the death of their nan and Finn begins to show an interest in newcomer Trudi, sister of the nearby estate's ringleader Tariq Siddiqui.

Jez and Sian plan a dinner party for the staff, but are shocked when Jez's estranged children arrive. At the school, Michael clashes with Grantly and Matt and Scout bond over guitar lessons. Michael also attempts to reunite the Taylors with their father, and Vicki decides to re-take her science A-Levels.

New Head of English Linda Radleigh arrives at Waterloo Road to Grantly's fury. Tasked with keeping an eye on Emily while her sister Lindsay is released from prison, she soon faces difficulties. Meanwhile, Chalky tries to impresse Janeece by signing up to Jez's Fit Club, and Michael spends time with Sian.

The last day of term starts badly for Michael when he finds a threatening note on the dashboard of his car. Meanwhile, Jez's unexpected arrival during the staff briefing scuppers any hope that the prize-giving will be the focus of the day. Grantly informs a rattled Michael that Jez will be making a formal complaint to the governors about his affair with Sian and matters come to a head when Jez pulls Madi and Zack out of class to take them to Ireland. As they drive off, Wayne slips into school with revenge on his mind and Michael finally gets a chance to confront his stalker. Elsewhere, Emily tries desperately to prevent Scout from moving away with her foster parents and Ronan and Vicki say goodbye to Waterloo Road. In the final moments of the episode, Michael is run over by Linda. As she gets out of the car, she tells him, "It's over Michael. We could have been so good together."

Following Michael's hit-and-run, Jez is the prime suspect. However, after Chalky's suspicions are aroused Linda finds herself under scrutiny. Meanwhile, Sian is acting headteacher and faces the infiltration of new gang the DSC. DSC member Mason Price threatens Tariq's fresh start as the gang targets Finn, and Grantly criticises the work of dinner lady Maggie Croft, but also learns how to make easy money.

Josh's promise to quit drugs for good is tested when his charismatic dealer Grady gets in touch and his drug problem starts to spiral out of control. Tom is tasked with overseeing the selection process for the new Head of English. Candidate, Nikki's disciplinarian approach gets results, but Tom takes offence when she offers him some words of advice about Josh. When Nikki later chases down Grady, Tom offers her the role. Meanwhile, it's touch and go for Matt's baby daughter Martha, and Grantly's at a loss when he mislays a large sum of money.

• Note: First appearance of Nikki Boston

Grantly is dismayed at Fleur's deteriorating health and, after some advice from Maggie, decides to take action. Fleeing Waterloo Road, he takes Fleur away from her nursing home to a cottage near where they honeymooned, in the hope it will jog her memory. A concerned Tom follows, but finds Grantly regretting his decision – he needs to accept that his wife has gone. Back at the nursing home, Grantly and Fleur share a tender moment before she slips away. Meanwhile, Trudi's world is plunged into crisis by the shock discovery that she's pregnant. Elsewhere, Nikki encourages Tom to be honest with Josh about his mental health issues.

It's the day of the school fun run and Jez's star athlete Mercedes has been training hard to impress him. When Mercedes is injured on the run she persuades Jez to take her home and – misreading the signs – tries to kiss him. Jez's life starts to unravel and Sian later admits her true feelings about their relationship. Meanwhile, relationships are tense as Trudi makes a decision about Finn. Whilst Craig declares his love for Janeece in front of everybody, he asks Janeece a life changing question. Elsewhere, Grantly returns to work, barely a week after the loss of his wife. Meanwhile during the fun run Kyle and Tariq qet into an altercation with Eugene Garvey Mercedes Brother and leader of a rival gang of the DSC called the MSB (Murray Set Boyz) and then almost getting into a fight at school only to be chased by Mr Byrne and Mr Chalk,while Mr Byrne reveals his fear that he might have let a turf war onto waterloo road.

On the morning of her art exam, student Shelby is desperate for alcohol, having spilt her secret stash of vodka. She makes it to the exam, but without managing to get her fix, she struggles to concentrate. Knowing that she has failed, Shelby suggests to Madi that they go to the pub to celebrate Madi's 18th birthday. At the same time, Alan Dixon is at Waterloo Road to conduct a review for the Local Education Authority, but things aren't looking good for the school when he sees what state Shelby and Madi are in – Shelby is his daughter. Meanwhile, Jez realises he needs to prioritise his relationship with his children, and Kyle oversteps the line when he is caught selling illegal vodka shots, punching Nikki in the face and being permanently excluded. Elsewhere, Janeece is led to drastic measures as she struggles financially, Finn falls further under the influence of the murray set spray painting a MSB tag outside of Tariq's house, and a former pupil of Michael's arrives with a very interesting offer, and Finn leaves the school in anger so he can be with Eugene and the gang.

The final day dawns on Waterloo Road in Rochdale as Michael arrives to break the news of the school's imminent closure. Pondering the future of the pupils, he discovers that not all of them have received a place at alternative local schools. Reeling from the realisation, Michael tackles the possibility of taking a handful of students with them and asks Lorraine to consider setting up a boarding house at the new school. Elsewhere, Josh returns to school and quickly learns of Finn's recent involvement in the gang trouble. His worries soon escalate when Eugene and the MSB invade the school to teach Finn a lesson, while Tariq receives a crossbow in the post to which he discovers Kyle has ordered as part of his own revenge against plot. As the school prom gets underway, it's a race against time to stop Kyle. As Tariq realises the error of his ways, he warns the prom goers of the crossbow just as Kyle takes aim – and Josh arrives to save Finn. Meanwhile Finn and Trudi get back together and Janeece receives a surprising offer. Later, as the school's conversion into new, luxury apartments gets underway, both staff and students considering the move take a trip to Scotland to visit the new school. During a stop-off at the border, the group revel as Grantly proposes to Maggie – just as an out-of-control lorry hurtles towards them.