After Larry buys an expensive stereo chair, their apartment is robbed along with the chair. So Larry buys a high-tech security system but takes all the responsibilities himself and won't share them with Balki.

Balki agrees to babysit their new neighbor's daughter Tess and lets her do whatever she wants. She ends up terrorizing the apartment which disturbs Larry who is trying to write a possible front-page story for a city council expose. She also disrupts the staff at the Chronicle.

Jennifer was asked out on a date by an old boyfriend and checked with Larry first. But he agreed thinking that's what she wanted but she really wanted to know here their relationship is going. Confused, She breaks up with Larry who is too scared to tell her how he really feels but they eventually end up getting engaged.

Larry and Balki buy a race horse and when they race him, he comes in last. They later discover that he has an incurable disease. But Balki takes the horse back to the apartment and tries a Myposian potion to cure him.

A 500 year-old feud in the Bartokomous family is back when their rival Zolton Bauchelitis is coming to fight a duel with Balki. Larry gets caught up in it and must fight Zolton himself. However, they don't try and kill each other, the winner takes the loser's ears.

Larry's fear of flying resurfaces when he interviews a pilot--who invites Larry to witness his aerial maneuvers firsthand.

Larry is sent to Los Angeles to write an article about a soap opera star's wedding and Balki goes with him. While attempting to get a better story, they get chased by mobsters after they witness and video tape Marco Madison, a big time gangster, murder an undercover drug agent and Larry and Balki are prime suspects.

Larry and Balki manage to play back the tape proving their innocence, but they have trouble getting the tape to the police after they are mugged and captured by Marco's men.

Larry buys an engagement ring for Jennifer from a street hustler unaware that he sells phony diamonds. When he discovers that the ring is fake, Larry sells his car, buys a real diamond and tries to switch the rings before she gets it appraised the next day.

After doing some research, Larry finds evidence that Mary Anne is a serial killer but Jennifer is very skeptical since she's known her all her life. But Larry gets scared when Mary Anne is planning on taking Balki mountain climbing, and when Jennifer gets called into work, he thinks that Mary Anne killed her. It turns out to be a total misunderstanding.

Larry's popular high school rival Bunky McDermott comes to see him and invites him and Balki to a formal dinner party and make him a member of his popular club. Larry is so excited and lies to Bunky about going to the Caribbean but to convince him, Larry and Balki spend some time in a tanning bed and end up getting sunburned.

When Balki practices his magic tricks for the Youth Center Show, Larry refuses to go because he's been having trouble finding a story for Mr. Wainwright. But after he finds out that Margaret Thatcher will be stopping by, he sees a great interview and decides to go.

Balki finds a box with over $50,000 cash in it. Larry wants to keep it but Balki is insistent on finding the rightful owner, which won't be easy, especially with Mr. Gorpley scheming to get it anyway he can.

Grandpa Appleton comes for a visit and is quite a surprise: He's 76 years old and is acting like a wild teenager, and has a much younger girlfriend. Larry thinks he should act more his age but Balki thinks that it's okay acting as young as he feels.

During the cold season, Larry has a bad cold, along with everyone else except Balki. So Balki's mama sent a plant that cures Larry and everyone else and Larry decides to grow it big to make money off it unaware that growing it big has wacky side effects.

Larry manages to get tickets to go to a Bulls game with Balki on the night that Larry promised to take Jennifer to the ballet. So Larry lied to Jennifer saying that he had to work. Balki tells him a story about an old Honeymooners rerun where we see Ralph (Larry) lying to Alice (Jennifer) about having to work late when he plans on going bowling with Norton (Balki) and Alice ends up finding out about it while she was with Trixie (Mary Anne). However Jennifer found out about the basketball game and Larry is in a heap of trouble.

Jennifer's mother comes to town and wants to meet Larry, and Jennifer doesn't think that her mother will approve of her marrying him. Later on, Larry falls down the stairs at the Chronicle and gets amnesia which lasts through the dinner where Larry meets Mrs. Lyons.

Balki is discovered by a music promoter and he offers him a record and video contract. So Larry convinces Balki to accept and he becomes the newest rap star after shooting a video called "Fresh Young Balki B." But after they watch it, they notice that a different voice was dubbed in and Balki quits.

Balki runs for student body president and lets Larry help and as usual, Larry goes completely over the top. The students however, don't like the idea of Balki's idea of reinstating the language requirement so Larry thinks Balki should lie in order to win but he won't.

Larry suggests to Mr. Wainwright that a Chronicle employee stay on a billboard until the Bulls' losing streak is over. Mr. Wainwright liked the idea and assigned Larry to find someone to do it. So he tricks Balki to do it but when Balki wants to get down, Larry kicks the ladder down and they both get stuck up there until the Bulls win.

Balki's catering business really takes off when he is catering for Texans. At Larry's advice, Balki books another party on the same night unaware that Larry already booked another party without telling him. Even with Larry helping him in the kitchen, and Jennifer and Mary Anne serving, all three parties are too much for them to handle.

Larry is going duck hunting with Mr. Wainwright and Balki wants to go to get revenge on something that happened to him when he was a kid involving a duck. Larry lets him go when he sees what a great shot Balki is but it turns into a disaster when Balki will only let them kill one kind of ducks - pterodactyls.

Balki convinces Larry to become a volunteer fireman but after the fire chief wore him out, Larry refuses to go back to the fire station until he discovers that Jennifer gets really turned on by firemen. However, the only fire they get to fight is in the fire station.

Balki and Mary Anne expect Larry and Jennifer to set a wedding date but they're too scared. To help them, Balki gives them an official marriage test to see if they're right for each other but things don't go as expected. In the end they set the wedding for September regardless of what the test says.