An underwater photographer is attacked and more than a few people believe a sea monster is responsible. With the hysteria over the 'sea monster', Mitch and his fellow lifeguards are determined to get to the bottom of the mystery. Shauni's work as a lifeguard leads to conflict with a bunch of locals and her father but her father has a change of heart after he learns more about what she does.
Harvey is feeding off the local panic, making a small fortune selling ""Creature in the bay"" T-shirts. Just when things start to calm down, the situation escalates when a fishing boat catches something huge in its net, and is pulled underwater by the mysterious entity below the surface.
A fisherman tricks new lifeguard Megan into rescuing him in order to attack her. When he continues to stalk her, Mitch has to find a way to stop him. Meanwhile, when Shauni suffers from lifeguard burnout, Eddie takes her on a romantic weekend getaway, which quickly turns passionate.
Mitch is offered the lead role in an action movie when the star is injured, but risks losing his role when he rejects the amorous advances of the film's producer.
Mitch's brother Buzzy comes to visit with his estranged son Kyle, who proves to be a bad influence on Hobie. When Kyle illegally surfs near the condemned San Dimas Pier, he collides with a submerged piling, and is sent underwater, unconscious.
Cort returns to Baywatch, helping Eddie in an aquatics program designed for inner-city youths. When Eddie takes a gang leader under his wing, he finds himself in conflict with the boy's father, who has encouraged his son's gang activity.
Eddie teaches an overweight girl who has loved him from afar the importance of self-esteem, while Mitch and Hobie adopt a dog that is the only witness to the owner's kidnapping.
Eddie's life is torn apart by the accusation of statutory rape from the overprotective father of a lonely teenager trying to make friends lied to a group of other teenage girls about her encounter with Eddie. Mitch deals with the anger of a paraplegic former lifeguard.
Facing rape charges, Eddie is suspended from Baywatch, but when Shauni confronts the teenager to ask her to tell the truth to exonerate Eddie, the teenager, tired of feeling like an outcast, attempts to kill herself. Mitch saves a paraplegic's life in a daring glider rescue.
Harvey and Mitch pursue and capture a disgruntled gambler turned high-seas pirate. Meanwhile, Eddie struggles with the disapproval of Shauni's father. While Eddie is walking away from Shauni's sisters engagement party, Kim gets her hand stuck in the pool pump and luckily Eddie saves her.
After seven years, Eddie's first love appears in Los Angeles, complicating his life with Shauni and entangling him in a web of lies and an unsolved murder.
