On their final night of summer vacation in 1962, high school graduates Curt Henderson and Steve Bolander encounter friends, the self-assured drag-racing champion John Milner and the endearing yet socially awkward Terry "The Toad" Fields, at Mel's Drive-In in Modesto, California. As Steve and Curt prepare for their journey "Back East" to begin college the next day, Curt finds himself torn about leaving. Steve suggests to his girlfriend Laurie, who is also Curt's sister, that they should date other people while he’s away to "strengthen" their bond. While Laurie initially masks her feelings, the suggestion quietly influences her behavior throughout the evening.
Later, the group heads to a high school sock hop. On the way, Curt becomes infatuated with a stunning blonde driving a white Ford Thunderbird, who tantalizingly mouths "I love you" before making a turn. This fleeting moment sends Curt on a relentless quest to find her throughout the night. After the event, he is coerced by a gang of greasers called "The Pharaohs" into joining them in mischief, including stealing coins from arcade machines and vandalizing a police car. During a suspenseful encounter, the leader of the Pharaohs quips about "The Blonde," labeling her a prostitute, much to Curt's disbelief.
Meanwhile, with Steve allowing Terry to use his car while at college, Terry adopts a false persona as "Terry The Tiger," cruising the strip and attempting to woo the rebellious Debbie. He engages in a series of lies about the car being his and buys alcohol despite not having an ID. The night takes a turn when thieves steal Steve's car while he and Debbie share a romantic moment in a secluded spot. After a night of excessive drinking leaves Terry feeling nauseous, he attempts to retrieve the stolen car but is beaten up by the thieves until John comes to his rescue. In a moment of honesty, Terry reveals to Debbie the truth about his deception, but she finds charm in his honesty, agreeing to meet him again.
In a twist of fate, John unintentionally picks up a precocious 12-year-old named Carol, who cunningly negotiates her way into a night of cruising. He fabricates stories about her being a cousin to cover his babysitting duties, and after a series of amusing arguments, he is compelled to protect her when they encounter harassment from another group on the road. Meanwhile, skilled racer Bob Falfa has set his sights on challenging John for his drag-racing title, and, during the night, he finds an emotional Laurie after her confrontation with Steve.
In a moment of desperation, Curt rushes to the radio station in hopes of reaching the enigmatic disc jockey "Wolfman Jack" to broadcast a message for the blonde. An employee informs him that the Wolfman's shows are pre-taped, but he amusingly advises Curt to "get your ass in gear" while promising to air the message. Unbeknownst to Curt, the employee is indeed the Wolfman, who ultimately grants his request.
After escorting Carol home, John encounters Bob Falfa, who successfully goads him into a decisive race along Paradise Road, drawing a crowd of spectators. As the race begins, John initially takes the lead, but disaster strikes when Bob's tire blows, sending his car careening into a ditch before collapsing and bursting into flames. Realizing Laurie is inside, Steve rushes to the scene where they manage to escape moments before the explosion. Despite the circumstances, John assists Bob, while Laurie implores Steve to remain with her, receiving his reassuring commitment to stay in Modesto.
Later, Curt receives a call from the payphone, finally speaking to the mysterious blonde, who tantalizingly hints at a meeting that night. He informs her of his departure, and as Curt prepares to board a plane, he catches a glimpse of the white Thunderbird below him, provoking deep reflection as he gazes out into the vastness of the sky.
In a poignant postscript, the fates of the four friends are revealed: John tragically lost his life to a drunk driver in 1964; Terry was reported missing in action in Vietnam in 1965; Steve became an insurance agent in Modesto; and Curt found solace as a writer in Canada.
