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Mary’s new romance with a tall, dark and very handsome man seems to be progressing quite well until her friends convince her that she’s attracted to him only because he’s so attractive.

Joanne Forbes accidentally collides her car with Mary Richards’ and the girls become friends. When the two begin to spend a great deal of time together, Rhoda Morgenstern, Mary’s longtime friend, becomes jealous. Joanne invites Mary to join her and two other friends for a game of tennis at a local private club, but when one member of the group doesn’t show up, Mary suggests that Rhoda substitute. To Mary’s surprise, Joanne begins to make excuses for not inviting Rhoda. Mary discovers that Joanne belongs to a restricted tennis club and that, despite her denials, Joanne is prejudiced. Realizing how much she values Rhoda’s friendship, Mary decides that she and Joanne should go their separate ways.

In the final episode, WJM-TV is sold, and the new owner, anxious to bring the fourth-rated news broadcast to a number-one position, begins by re-evaluating the news operations. On learning of the new emphasis on news, the news team fears Ted will be the first casualty. Much to their dismay, however, Ted is the only one the new owner approves of, and Mary, Lou, Murray and Sue Ann are fired. Crushed to see years of dedicated hard work end in unemployment, Mary faces a difficult task of keeping self control. Hoping to ease the shock, Lou Grant attempts to cheer up the disheartened ex-producer by sending for her best friends, Phyllis Lindstrom and Rhoda Gerard.

Pandemonium erupts in a usually smooth television news operation when Murray takes a step up to co-produce the news with Mary.

When the television news program is expanded from a half hour to an hour, newsroom boss Lou Grant tells Mary Richards she can hire an assistant to help her with the paperwork. Mary’s neighbor, Phyllis, has become available for the position because she has been fired by her husband after working a few days as his receptionist. When Phyllis puts her application for the job on the basis of their personal friendship, Mary is forced to hire her. Phyllis insists on being referred to as her co-worker rather than her assistant, and immediately begins disrupting the whole news operation. She becomes friendly with newscaster Ted Baxter and encourages him to attempt a one-man revolt and demand a huge salary increase. She also demands that he be given new writers, such as Norman Mailer and Truman Capote, for his show.

The WJM-TV news staff is excited when Mary’s renowned Aunt Flo – a prestigious newspaper journalist and an overwhelming prima donna – comes to visit their newsroom, except for Lou Grant, who isn’t particularly impressed. Despite Aunt Flo’s belittling, then trying to take over the WJM-TV news operation, Mary is determined to convince Mr. Grant that behind the old die-hard, steam-rolling newswoman, is a very nice lady.

Father Brian and Mary develop a professional closeness by working together on a children’s documentary for WJM-TV News, but Mary feels their relationship is getting too close when Father Brian tells her about a friend who left the monastery because of a woman, right after he (Brian) breaks the news to her that he wants to leave too.

Rhoda has good news: she’s madly in love with someone who shared her lunch table. And bad news: the man she loves owns the store she works in, and she has no idea how he feels about her.