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The late 1950s. (Circa 1958-1959).

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High schoolers Sandy Olson (Olivia Newton-John) and Danny Zuko (John Travolta) met and fell in love over the summer of 1958 and never expected to see each other again. When it comes time to return to high school in the fall, however, they find themselves both attending Rydell High where they travel in two different worlds. Sandy is a cleancut preppie from Australia while Danny is a black-jacket greaser and leader of the local T-Bird gang. When Danny rebuffs Sandy in front of his friends in order to maintain his "coolness", Sandy storms off in tears and chooses to hang with the Pink Ladies, a group of pink-wearing girls led by Betty Rizzo (Stockard Channing). But it soon becomes apparent that Sandy and Danny are still in love, and love always finds a way.

Grease is based on the 1971 musical of the same title by American composer/lyricists Warren Casey and Jim Jacobs, although there is a movie-based novel of the same name written by Ron DeChristoforo. The musical was adapted by Allan Carr for the screenplay written by Bronte Woodard. It was followed by Grease 2 (1982).

Sandra Dee (1942-2005) ("Look at me, I'm Sandra Dee"), along with Annette Funicello (1942-2013) ("Would you pull that crap with Annette?") were teenage movie stars of the 1950s. Dee rose to fame in Gidget (1959), in which she played a "girl midget" who finds her first love on Malibu Beach. Known as America's sweetheart, Annette rose to fame in Walt Disney's The Mickey Mouse Club (1955). Both Dee and Funicello were portrayed as virginal nice girls.

A "greaser" in the 1950s referred to a teenage subculture characterized by young men wearing blue jeans, black jackets, and sporting a greased-back hairstyle with the front hair pulled forward using two fingers, a hairstyle often referred to as a "waterfall". In other cultures, greasers were known as "hoods" and, in England, "rockers".

It's the last day of school, and all the students attend the Commencement Carnival on the school grounds. Rizzo and Kenickie (Jeff Conaway) are happy to learn that she is not pregnant and get back together. The T-Birds are astonished when Danny arrives, dressed in a letterman's sweater, explaining that he wants to become a jock in order to win Sandy back. They're even more astonished when Sandy arrives in skin-tight black pants, big hair, smoking a cigarette and looking like a greaser babe in an attempt to win Danny back. Sandy and Danny express their love for each other in song ("You're the One That I Want") and then the entire school unites to sing the finale ("We Go Together"). In the final scene, Danny and Sandy fly off in the Greased Lightning.