Dan finds himself between two girls when his childhood friend, Vanessa, returns to N.Y. and declares her feelings for him, just as he and Serena are trying to figure out what they mean to each other. At the masked ball, Blair sends Nate on a scavenger hunt, but Nate is distracted by his feelings for Serena. Although Blair said that outsiders were not welcome to the party, a disguised Jenny and Dan sneak into the ball. Finally, Lily asks Rufus to accompany her to an Eleanor Waldorf event only to make Bart Bass jealous.

Serena and Dan finally accept that they are crazy about each other, despite that they come from polar opposite worlds. Chuck thinks of investing in a club trying to make his father Bart Bass proud of him. Nate confronts his father, about the drugs he found in his house but he denies having a problem. Jenny discovers a secret that her parents have been keeping from her. Finally, Blair is devastated by Nate's actions when Jenny reveals that Nate kissed her by accident thinking she was Serena.

Blair is feeling heartbroken and guilty by the current state of her relationship with Nate and her recent indiscretion. But she manages to put on a happy face for her 17th birthday party and attempts to hide her feelings from her friends. Hoping that Serena and Vanessa can bond, Dan takes Vanessa to Blair's birthday party. Jenny brings her mother home as a surprise, but Rufus isn't ready to forgive and forget. Finally, Nate's parents ask him to make a huge sacrifice to save his father's business.

Dan invites Serena and her family to spend the holiday with his family, creating an uncomfortable situation for Rufus and Lily. The children are unaware of their complicated romantic past. Meanwhile, Blair's freaks out when she learns that her father isn't coming home for Thanksgiving. Nate spends the holiday with his family, but their awkward dinner quickly goes from bad to worse.

Blair is over the moon that she is dating royalty and has every intention of becoming a royal herself, but a scheming Chuck has other plans for Blair and her new love, Marcus, when he introduces Blair to Marcus' stepmother who happens to be Catherine. Meanwhile, Nate learns the downside to having an affair with Catherine when he keeps getting caught in his lies and learns his family has gone bankrupt due to his father jumping bail.

It's Thanksgiving time and Blair is offended when her Mom's new man hijacks her Thanksgiving traditions. Lily attempts to strengthen the frail bond between Rufus and Jenny. Eric discovers a secret about Bart. Vanessa and Chuck help Nate deal with his father.

Chuck hosts a "Saints and Sinners" masquerade party at the Empire Hotel. At the party, Dan and Nate don't know what to make of Serena's strange behavior and mixed messages. Blair sets her sights on becoming the new face of Anne Archibald's foundation for girls, but Anne is concerned that Blair's friendship with Chuck Bass may be problematic.

Chuck, Serena, Blair, Dan, Jenny and Eric find themselves faced with a crisis when a member of one of their families is hospitalized. Meanwhile, Nate attempts to help his parents, The Captain and Anne, put their complicated past behind them and reconcile.

Blair and Dan join forces to find Juliet. Serena expounds her boarding school experiences to her therapist and discovers the truth behind Juliet's vendetta against her. Meanwhile Chuck suspects Lily has not told him the full truth.

Serena enlists Charlie to go undercover Gossip Girl-style to determine why Dan and Blair are spending so much time together, and what role an unexpected visitor is playing in their lives. With Nate’s help, Raina decides to go on a search for her long-lost mother. Chuck’s hopes about his legacy are dashed with the reveal of devastating information from the past.