After three months on the island, Will finally returns only to learn that Jack and Grace have bonded in his absence. Meanwhile Grace still can't decide between Josh and Ben; When Karen tries to smuggle pearls in the States, Rosario ends up taking the rap.
Terrified after someone breaks into her apartment, Grace stays with Will. Unfortunately, having both her and Jack under one roof is driving Will crazy and he forces them to choose which one will move out; Jack and Karen are still at odds over his divorce from Rosario.
Will and Jack can't wait to arrive at the house of two old friends who are known for their wild parties but they discover that the former party animals are now sedately raising an adopted baby girl -- and Will shocks Jack when he volunteers to test his shaky parenting skills by babysitting her for them. Elsewhere at a snooty yacht club, Grace believes that Karen is jealous of her romantic relationship with Ben but then later regrets taunting her.
Grace's delight in having a bright intern whom she can mentor turns into horror when the young woman re-makes herself into the spitting image of sassy, brassy Karen -- and that's at least one too many Karens to handle. Meanwhile, Will and Jack volunteer to act out scenes for a gay sensitivity seminar for the local police but the peaceful intent is lost when they tussle with two lesbian cast members who strongly object to their non-inclusive, sexist language.
Grace has made up her mind to break up with Ben because she's convinced their relationship is going nowhere -- but his charm and refusal to call it quits tempt her to reconsider. Meanwhile, Jack's latest and most outrageous cabaret gig is an absolute bomb until he frantically works an unwilling Will into the act by mercilessly ridiculing his attending friend's most-private confessions.
Grace rejects an ex-boyfriend's suggestion that she participate with him and his girlfriend in a romantic escapade but when she confides in Will and Karen -- who fall down laughing at the prospect -- the conservative Grace considers throwing caution to the wind. Meanwhile, Will tries to help a newly employed Jack meet a customer at a clothing store by prompting him with witty lines like a latter-day Cyrano de Bergerac.
Will reluctantly decides to use a birthday gift certificate from Grace to consult a psychic about his future and encounters an absent-minded fortune teller whose frighteningly personal predictions leave him reeling. Elsewhere, a guilt-ridden Grace hires a lackadaisical waiter whom she helped to get fired while Jack, who forever idolizes music, TV and film legend Cher, stumbles onto the real deal and meets the Oscar winner herself -- whom he mistakes for a drag queen.
In a flashback to Thanksgiving 1985, coed Grace invites her college boyfriend Will home to meet her family, but their romantic relationship swerves dramatically when a conflicted Will phones a teenage Jack for some crucial advice. Unfortunately, Will and an angry Grace end up temporarily estranged when he blurts out the truth and she orders him out of the house -- and her life.
Grace has medical procedure that leaves her with a sore on her lip and when she runs into her new boyfriend she does her best to avoid him but decides to come clean. He also does the same, by telling her he has 6 toes on one of his feet. And when they spend some time alone, he decides to take his shoe off and she becomes uncomfortable. Will and Jack discover that they're seeing the same guy who was unaware of their connection. So they decide to both bow out but the guy keeps calling Will, and Grace convinces him that Jack will understand.
When they are asked to read at the civil union of two friends, Will and Grace verbally spar over her self-serving, get-and-take attitude where Will is responsible for everything -- but what's really bugging him is the overwhelming feeling that Grace is behaving more like a wife than an old friend. Meanwhile, Karen tries to help a caffeine-addicted Jack get over a failed crush but he's so jacked-up on Java that only a tough-love approach will work.
Will and Grace get carried away in an escrow undertow when they pose as a wealthy couple shopping for homes of the rich-and-famous and visit Sandra Bernhard's posh townhouse where they become fast friends and make an fake offer -- but their ploy fizzles when she accepts their offer. Elsewhere, Karen is forced to attend her young stepson's swim meet and is uncharacteristically chastised by another mother for arriving late while Jack begins attending Co-dependents Anonymous meetings.
Will wanting to impress his new boyfriend who's a sport enthusiast asks Grace to teach him about sports starting with hitting a ball which he does terribly. Jack and Karen asks Grace to decorate Jack's apartment and initially they're difficult when she makes her proposal. But when they see a phony letter Grace made to get out of jury duty which states that she's mentally unbalanced, they give in to her demands not to upset her.
Will gets upset when his new boyfriend refuses to recognize him as his boyfriend when they're in public and introduces him as his brother. Grace tells him he should dump him but Will finds it difficult to do that. And Karen discovers that Stan is giving a portion of his estate to charity in his will.
Jack receives a letter that indicates he is black. Grace inherits an old a car from a deceased uncle. She sells the the car that she believes to be a lemon to a nun. Meanwhile, Karen discovers that Rosario is moonlighting for Beverly Leslie. Grace realizes that she should have kept the car and tries to buy it back.
Will is dating a guy who is not exactly attractive because he is fond of his dog. Will takes care of the dog while he's away and when Jack loses him, Will doesn't know what to do. Grace meets Karen's nephew and she keeps Grace from dating him by telling lies. Grace thinks Karen doesn't think she's good enough for him.
Will and Grace play poker with Larry, Rob, and Joe but because of certain annoying habits, the guys want Grace out and tell Will he has to tell her. Will tells her and she tries to change, when she does, she tells Will what she's doing. Karen wants to have plastic surgery but she wants to see it done on someone else first. So she gets an acquaintance to have the procedure first.
Graces fears Will is pulling away, so she buys a piano for them to bond over. Meanwhile Jack is depressed over a recent breakup and channels his energy into writing roman novels, which Karen quickly becomes addicted to.