Serena returns to town under abrupt and mysterious circumstances, similar to how she left just one year ago, and her best friend Blair is less than thrilled about this.
Blair tells Serena she knows about her past betrayal, then turns a cold shoulder to her; Chuck hosts a fund-raiser brunch, and Serena brings Dan to the event; and Jenny and Blair become friends.
Dan and Nate compete for an usher position when Ivy League representatives visit their school. Meanwhile, Blair learns a secret about Serena; Jenny and Eric get acquainted; and Rufus asks Lily for a favor.
Blair's excited to be chosen to model for her mother's new fashion line---until Serena upstages her and it feels just like old times. Meanwhile, Nate and Chuck embark on a wild boys' weekend.
Dan tries to impress Serena on their first official date. Meanwhile, Jenny attends Blair's sleepover, where a dangerous game of truth or dare is played; and Lily turns to Rufus when Eric goes missing from his treatment center.
Dan's childhood pal Vanessa (Jessica Szohr) returns to town and tells him she wants to be more than friends. Meanwhile, a disguised Dan and Jenny sneak into Blair's masquerade ball; and Lily hopes to provoke jealousy in Bart Bass by asking Rufus to be her date at an event.
The kids face a variety of parental issues: Nate worries his father has a drug problem and confronts him about it; Jenny uncovers a secret her parents have been keeping from her; and Chuck tries to impress his demanding dad by investing in a club. Elsewhere, Blair is disappointed in Nate once again; and Dan and Serena acknowledge their true feelings for one another.
At her 17th-birthday party, Blair attempts to mask her strained relationship with Nate; and Dan takes Vanessa to the party so that she and Serena can bond. Meanwhile, Jenny brings her mom home for a visit, much to Rufus' surprise; and Nate's parents pressure him to make a sacrifice for the good of their family.
Dan invites Serena's family to share Thanksgiving dinner with his family, unaware of the awkward situation this creates for Rufus and Lily. Elsewhere, Nate and his parents also share an uncomfortable holiday meal; and Blair gets upset when she finds out her father won't be coming home for Thanksgiving.
Serena's grandmother has much to say about the upcoming debutante ball, insisting that her reluctant granddaughter attend---and find a more suitable escort than Dan. Meanwhile, Nate accompanies Blair to the ball as her friend; and Jenny hopes to go to the upper-crust event, but her parents would rather she didn't.
Blair's father comes home for Christmas---and brings his boyfriend with him. Meanwhile, Serena and Dan plan holiday surprises for one another; Blair worries what information Chuck may share while vacationing with Nate; and Rufus and Alison's reconciliation hits a bump in the road.
The kids break into the school swimming pool at night to have a party, but someone nearly drowns. In the face of expulsion, a pact of secrecy is formed, which Dan is hesitant to be part of, causing tension between him and Serena. Meanwhile, Vanessa learns about Chuck and Blair's affair; and Lily considers expressing her true feelings to Rufus.
Serena is seen purchasing a pregnancy test, and this info gets reported on Gossip Girl's Web site before the facts are all checked.
A dethroned Blair musters up the strength to head back to school, and Jenny tries to keep up with the financial demands of the in crowd. Meanwhile, Serena, Eric and Chuck adjust to their blended families living under one roof.
As panic sets in for the juniors preparing to take their SATs, Serena has the added stress of dealing with the return of Georgina Sparks (Michelle Trachtenberg), someone from her bad-girl past. Meanwhile, Jenny decides to get a boyfriend, thinking this will elevate her social status. Asher Hornsby: Jesse Swenson.
Georgina threatens to disclose damaging details about Serena's past, while Blair and Jenny spread rumors about one another through Gossip Girl. Elsewhere, Dan has information about Asher that Jenny ignores; and Rufus turns to Lily for parenting advice.
An embarrassed Serena resurrects some troubling old habits as she continues to hide the truth from Dan, and her feuding friends rally to help her in her time of need. Elsewhere, Rufus' band scores a high-profile gig, where an unexpected guest shows up to lend him support. Singer Lisa Loeb appears as herself.
In the first-season finale, Blair comes to Serena's defense and faces off with Georgina, while an emotional Serena finally comes clean to Dan about her past. Elsewhere, Lily continues planning her extravagant wedding to Bart, but thoughts of Rufus keep distracting her. Model and heiress Lydia Hearst guest stars as Lily's interior decorator.