Tracy goes to the audition, but is ridiculed by the girls on the show and sent away by Amber's mother and show producer, Velma Von Tussle. Sitting in detention, a frustrated Tracy learns some new dance moves from Seaweed J Stubbs, a black student whose mother is Motormouth Maybelle, the DJ who hosts the monthly Negro Day on "The Corny Collins Show." The next evening there is a school dance and, there, Tracy is able to impress Corny with the new moves she picked up in detention, earning her a spot on "The Corny Collins Show." During her debut, Link Larkin sings a song just for Tracy ("It Takes Two"). Now a local star, Tracy gets an offer to be the spokesgirl for Mr. Pinky's clothing store, The Hefty Hideaway, which gets her mother out of the house for the first time in years as the duo heads to the store to update their wardrobes ("Welcome to the Sixties").

At school, Tracy continues to be teased by Amber and becomes the target in a dodgeball game. After the game, Link, Penny and Seaweed stay behind to help Tracy and, there, Seaweed invites them to join him at his mother's record shop ("Run and Tell That"). The Von Tussles barge in and spoil the party with their bigotry, but this gives Tracy the idea to integrate "The Corny Collins Show" by having Motormouth and her daughter, Little Inez, crash Mother/Daughter Day on the show. Fears of police and jail don't stop Tracy from moving forward with the plan.

Unfortunately, the plan for integration lands all of the mothers and daughters in jail ("The Big Dollhouse"). Everyone gets out, except for Tracy, who is denied bail ("Baltimore – Reprise"). Link comes to the rescue and professes his love for Tracy while, elsewhere, Seaweed and Penny reveal their feelings for each other too ("Without Love"). The kids hatch a plan to get Tracy on the nationwide Miss Teenage Hairspray broadcast, and bring the news to Motormouth, who expresses that she will never stop fighting for equality ("I Know Where I've Been").

Corny Collins begins his nationwide broadcast ("(It's) Hairspray") and introduces Amber for her dance ("Cooties"). Just before Amber is crowned Miss Teenage Hairspray, Tracy and her friends storm in and take over the show ("You Can't Stop the Beat – Part 1"). Corny declares Tracy is the new Miss Teenage Hairspray 1962, and Tracy declares that "The Corny Collins Show" is officially integrated. Edna makes a grand entrance, and even the Von Tussles can't resist the celebration ("You Can't Stop the Beat – Part 2").