While on their way to Da Nang for a state dinner, McMurphy and K.C. are captured by the Viet Cong when their jeep breaks down in the jungle and are placed in an underground tunnel complex. McMurphy is then forced by Mai's brother, Tuan, to operate on their severely wounded cadre leader while K.C. plans an escape.
After Miss America backs out of a scheduled appearance at China Beach, the new Red Cross volunteer, Holly Pelegrino, challenges the nurses on behalf of the Red Cross Volunteers to compete in a Miss China Beach beauty pageant. Meanwhile, McMurphy uses a little guilt and a little blackmail to get K.C. to visit a wounded soldier in the hospital whose face has been badly disfigured in order to boost his morale. Also, Frankie gets assigned to the motor pool and meets the manager Sarge Pepper, a redneck army sergeant not very eager to have her there.
A young Vietnamese girl delivers an Amerasian infant boy to Dodger and tells him that he is the father, which triggers his inner turmoil. Meanwhile, McMurphy is laid up in the hospital suffering from dysentery caused by a drinking binge, and Holly tries to get the China Beachers to answer mail from a 7th grade class in Colorado.
Black humor takes the form of a 'Weekend at Bernie's' theme when visiting colonel dies in the company of K.C., in which she then asks Boonie and Hyers to help her find a way to decently dispose of the corpse. Meanwhile, a French doctor named Dr. Bernard, shows an interest in McMurphy. Sarge Pepper asks Frankie for advice about courting Lila, whom he develops a crush on. Also, Dr. Richard worries over a wounded grunt with a head injury that has permanently altered a his mental capacity, while learning that his ex-wife is being courted by another man back home.
China Beach celebrates a rainy 4th of July as McMurphy attracts the attentions of the new GI, Vinny Ventresca, while Dr. Bernard continues to pursue a romance with McMurphy, and shows her his life which include his two children from previous relationship and his psychotic Vietnamese ex-wife, Roxanne, living in a local asylum.
After Dodger tells a campfire ghost story, the unseen specters of relationships past, present, and future haunt the folks of China Beach. K.C. refuses to look into the past of her dead father when a box of his belongings arrives for her to sort out. Meanwhile, Beckett tries to come to terms with Mai over their backgrounds. McMurphy begins to think about pursuing a romance with Dr. Bernard. Also, Dodger tries to adjust to his present and future life with his Amerasian son. After Dr. Richard gets distraught when he learns that his ex-wife is remarrying back home, he ...
Holly prepares herself for a "Battle of the Bands" concert and asks Hang, a Vietnamese chore woman, to perform with her. But later, Holly becomes suspicious when circumstantial evidence points to Hang having connections to the Viet Cong after a number of bombings and mishaps occur at China Beach and in the area. Frankie is wounded in one of the bombings and becomes paranoid of all Vietnamese around her. Meanwhile, McMurphy is forced to work in a civilian ward while maintaining her interest with Dr. Bernard.
Hyers freezes during a battle, causing a rift between him and Dodger. Meanwhile, McMurphy becomes vulnerable to Vinny's advances after having a miserable dinner with Dr. Bernard and his friends. Also, Boonie becomes taken up with a non-English speaking Filipino singer, who's not what she appears to be.
Dodger is not pleased to the two new additions to his patrol: Beckett who wants to find out what's it like that "his men" experience out in the bush, and Cat Von Seeger, a photojournalist who wants a story and pursues Dodger's second-in-command Jesus "Answer Man" Zapita.
McMurphy befriends a wounded Cambodian, named Seak Yin, that Dodger's patrol brought back who claims that he was pressed into service by the Viet Cong, and she and Dr. Bernard try to intervene when Seak Yin is accused of betraying an ARVN patrol force to the Viet Cong. Meanwhile, a tough, no-nonsense new officer, named Major Melvin P. Otis, arrives to take control of China Beach, much to Lila's dismay, and begins to set his sights on K.C.
After a circus comes to China Beach, it will take more than magic for the people to save their love lives when McMurphy unhappily finds herself caught in a love triangle with Dr. Bernard and Vinny. Meanwhile, Boonie tries to get closer to Holly. K.C. and Major Otis get an unpleasant surprise when they meet at a state dinner when he runs into her while she's on the job soliciting. Also, the demoted Lila turns her frustrations on Sarge Pepper.
A Vietnamese prostitute that was on K.C.'s payroll is found murdered, and K.C. tries to find out who killed her, while caring for the prostitute's orphaned teenage daughter whom is threatened to go to work in a local brothel. While on the case, K.C. wonders why Major Otis does not want to order an investigation and ignore the murder.
With his tour of duty up, Dodger decides it's time to go back home and wants to take his Amerasian son with him. But he finds the red tape almost impossible to wade through and tries to K.C.'s help in finding a shortcut.
Looking for a little adventure, Frankie and Beckett form a pirated radio station in the GRU building and become the disk jockeys Miss Wizard and Dr. Dark, who play a practical joke on the air by declaring peace. But they're horrified to see it get totally out of control. Meanwhile, K.C. plots to move her business from China Beach while trying to get Boonie to drive her to Da Nang, while Lila faces a possible separation from Sarge Pepper in going home, and McMurphy and Dr. Richard talk about life back in the world.
McMurphy finds herself in an ethical dilemma when she saves the life of Vinny's buddy, though he will remain brain-dead for the rest of his life. Her Catholic beliefs of the non-practice of euthanasia won't allow her to let the man die despite Vinny pleads and Dr. Richard's orders. Meanwhile, Frankie gets orders meant for a different Francis Bunsen and finds herself promoted to sergeant commanding a squad of tough grunts led by Answer Man.
Back in his home town with his family, Dodger is drifting through a meaningless existence in dealing with his mother, father, younger sister, his old Vietnam vet buddy Sweetness, and a former girlfriend named Sissy. All this takes a turn when an old high school friend asks Dodger to help him dodge the draft and take him to Canada.
Ruby and Ernie, a pair of mysterious ballroom dancers, waltz into China Beach and bring harmony to the bickering McMurphy and Dr. Richard, and bring peace and compassion to the area while completing their own mystical mission from heaven of finding their grandson recently killed in action.
K.C. is caught in the middle of a CIA assassination plot when a CIA hit man, named Ace, asks for her help to kill a suspected Viet Cong officer, but she gets arrested after being accused of the murder. However, it's K.C.'s friendship with McMurphy that goes on trial when McMurphy is asked to vouch for K.C.'s innocence. Meanwhile, Boonie befriends a resourceful Vietnamese teen who is reluctant to be drafted into the ARVN.
A flashback to 1966 shows McMurphy as a hospital ward nurse who joins the army and after months in basic training, arriving for the first time at China Beach where she meets Dr. Richard for the first time and she loses her innocence fast after facing the horrors of real war in dealing with the endless soldiers coming in for medical treatment and getting help from the head nurse, Jan Wyatt, and the head doctor, Dr. Singer, over handling the situations. Meanwhile, K.C. under the name of 'Charlene' and working as a secretary/call girl for the sleazy then-China Beach ...
Lila is upset at her failure to advance in the U.S. Army and is worsened by the arrival of her friend Libby, now a colonel, who comes to China Beach to do a recruiting film for army nurses. Meanwhile, McMurphy is unknowingly made the beneficiary of a soldier's insurance policy and receives $20,000 in a death benefit, which prompts an Army investigator to investigate possible misconduct on her part.
While the rest of the China Beach staff attends a rock concert at Firebase Geronimo, McMurphy and K.C. stay behind, get drunk, and enter a shared surrealistic dreamland of a destroyed fire base where they must deal with unresolved issues from their pasts under the guidance of a Native American solider, named Dream Walker, and K.C.'s former boyfriend Jones, both recently killed in action.