At East High School (in Albuquerque, New Mexico) ("Wildcat Cheer"), Troy Bolton tells his Jock friends, Chad Danforth and Zeke Baylor, about meeting Gabriella Montez on New Year's Eve during winter vacation on a ski trip. Gabriella, who has just moved to Albuquerque, also tells her newfound Brainiac friends Taylor McKessie, Kelsi Nielsen and Martha Cox of her vacation. We meet Sharpay and Ryan Evans, the two drama stars of the school. Sharpay is selfish, and Ryan follows her orders but tries to be friends with everyone. Troy and Gabriella have a flashback to New Year's Eve when they met. ("Start of Something New"). One-half of the song is during the flashback, then we return to East High where Chad, Taylor, Kelsi, Ryan, Sharpay, Zeke and other students sing of their New Year's Resolutions.
In homeroom, Mrs. Darbus tells her class of the upcoming winter musical, "Juliet and Romeo", a new version of Shakespeare's "Romeo and Juliet", written by Kelsi Nielsen, a shy East High student. When Ryan, Sharpay, Troy, and Gabriella start using their cell phones, Mrs. Darbus gives them all detention. Chad interferes, telling Mrs. Darbus that Troy cannot go because they have basketball practice after school and that they have an upcoming championship game. Mrs. Darbus then gives Chad a 30 minute detention, and gives Taylor detention when she remarks that Chad can't even count that high. At Gabriella's locker, Troy runs into her and they show their amazement of how they found each other again. Sharpay walks by and tries to flirt with Troy, but he shows no interest in her. Sharpay observes that he is interested in Gabriella and she is interested in him. Later, the Jocks have basketball practice ("Get'cha Head in the Game").
In a Science class, Gabriella shows her smarts by pointing out a flaw in the teacher's equation. Taylor is impressed and asks, on behalf of her Science Club, if Gabriella could join their team to win the upcoming Scholastic Decathlon, although Gabriella refuses. Sharpay overhears and has Ryan investigate by Googling her.
Discovering that Gabriella was a very intelligent Brainiac at her old school, Sharpay prints her newfound information and puts it in Taylor's locker. The students later head to the Mrs. Darbus's room for detention, and act like animals. Taylor then asks Gabriella again to join the Scholastic Decathlon team based on the printouts Sharpay planted in her locker, and Gabriella agrees. Everyone does the 'ball of noise,' and Coach Bolton comes to get Troy and Chad for practice and then talks to Mrs. Darbus about it.
The next day, thespians audition for the play ("Auditions"). Sharpay and Ryan audition as well ("What I've Been Looking For"). After the auditions have been declared closed, Gabriella and Troy sing the song as Kelsi intended it - much slower ("What I've Been Looking For (Reprise)"). Although Troy and Gabriella did not intend it to be an audition they are called back for a second audition. When their friends hear the news they spread it via cell phones ("Cellular Fusion").
Sharpay is furious, believing Troy and Gabriella have stolen the lead roles and broken the 'rules' of East High. Though most of the school agrees, lyrical chaos erupts during a lunch break when students begin telling their secret obsessions outside of their cliques ("Stick to the Status Quo"). The scene culminates with Sharpay getting 'caked' by Zeke (who secretly likes her), after Gabriella spins into him. Act I ends with Sharpay angrily shouting "Someone is going to pay for this!"
Jack Scott recaps events before Troy and Gabriella dance on the rooftop garden ("I Can't Take My Eyes Off of You"). Zeke comes to Sharpay's locker and tries to flirt with her. Meanwhile, the Jocks and Brainiacs plot against the infuriated duo during study hall. Sharpay and Ryan see the Jocks and the Brainiacs mingling together and imagine they are trying to help Troy and Gabriella. So Sharpay lies to Mrs. Darbus saying that Troy and his dad are trying to ruin the auditions because she gave Troy detention. Later at practice, ("Wildcat Cheer (Reprise)"), Mrs. Darbus talks to Troy's dad and then he talks to Troy. Gabriella comes to practice to see Troy while Martha comes and takes her to the lab. Troy's dad thinks Gabriella is the reason why Troy got detention. He tells Troy that he is a playmaker and not a singer. This infuriates Troy who angrily asks his father if he ever wondered if he could be both and storms off in a rage, leaving his father stunned.
The Jocks and Brainiacs put their plan to work, pushing at Troy and Gabriella to 'split up'. Eventually, Troy, furious with his friends for telling him the same things his dad did, gives in and pretends that he doesn't like Gabriella, completely oblivious to the phone in Zeke's hand, transmitting Troy's words directly to Gabriella ("Counting on You"). Gabriella hears and becomes very upset. Troy and Gabriella, lonely and upset, sing ("When There Was Me and You"). The Jocks and Brainiacs then realize that they have gone too far and feel guilty for ruining Troy and Gabriella's relationship.
The next day, Sharpay and Ryan are rehearsing for their callback while Sharpay talks to Ryan about her role in the school. Then Troy comes in looking for Gabriella and Ryan tells him that she is in the theatre. Troy goes to the theatre and tells Gabriella that they were set-up and he didn't mean what he said and sings to remind her of New Year's ("Start of Something New (reprise)").
Hearing that the callback date has been moved up by request of Sharpay to the same time as the big game and the Scholastic Decathlon, Troy and Gabriella announce to the Jocks and Brainiacs that they are going to not do the callback, but instead help their respective teams for their events. The Jocks and Brainiacs say they should do the callbacks. Troy and Gabriella refuse, but the teams decide to lend a helping hand anyway ("We're All In This Together").
On the day of the big game/Decathlon/callbacks, the students are excited for the festivities. Sharpay and Ryan perform their callback song ("Bop to the Top"), which at the same time happens with the basketball championship and the science decathlon, during which Taylor engineers an electronic meltdown in the decathlon and light malfunctions in the game, which forces all the students to move to the theater. Chad and Taylor explain to Troy and Gabriella that this is their only chance. Mrs. Darbus, hesitant to allow Troy and Gabriella an audition due to their lateness, has no choice but to let them audition as the auditorium fills with students ("Breaking Free"). Mrs. Darbus gives Troy and Gabriella the parts on the spot with everyone watching.
The end of Act II brings us to the gym where all the main characters wrap up their plots (Chad asks out Taylor, Zeke gets Sharpay to be nice to him, Jack Scott and Kelsi literally fall head over heels for each other, and Sharpay makes up with Gabriella and Troy). The Wildcats win the big game and the Decathlon. The students celebrate ("We're All in This Together (Reprise)") followed by a recap of all the major songs in the show ("Megamix").