Gabriel Kotter is a teacher in Brooklyn, New York who ends up teaching at his old alma mater: Buchanan High School. He has been assigned to teach the remedial students, better known as the Sweathogs, a group to which he used to belong.
Sweathogs tapping at the window for breakfast, coupled with the love, attention and time Mr. Kotter lavishes upon his students finally drive the neglected Julie to leave Gabe. Meanwhile, Kotter's classroom lesson on democracy goes awry when the Sweathogs vote Barbarino out and Freddie in as their new leader, provoking the rejected Vinnie to drop out of school.
Mr. Kotter seeks to reconcile with Julie, Freddie's leadership of the Sweathogs evokes the adage of absolute power corrupting absolutely and Barbarino weighs humility versus being a high school dropout and door-to-door Tidy-Didy cleanser salesman.
A flu epidemic requires several advanced students to join Kotter's class, where they quickly outshine his struggling students. Kotter boosts the battered self-confidence of his Sweathogs by demonstrating that not all smarts are book smarts.
Vinnie's 87 year old grandmother is in the hospital possibly on her death bed. When his grandmother dies he decides he must honor her death bed request of him and become a priest. He now walks the hallways of Buchanan telling everyone he loves them and organizing prayer meetings. But what is he to do when faced with an after school date with Bambi? Kotter and the rest of the guys must convince Vinnie that he just isn't cut out to be a priest.