Best friends and nerds Lewis Skolnick and Gilbert Lowe enroll in Adams College to study computer science. The Alpha Betas, a fraternity that includes most of the Adams football team, carelessly burn down their own house, and urged by Coach Harris, take over the freshman dorms. Dean Ulich designates temporary living space in the gymnasium, and allows the freshmen to rush the fraternities. Lewis, Gilbert, and several other nerds fail to join fraternities, but are able to secure a dilapidated house near campus and repair it as a residence.
The Alpha Betas, led by star quarterback Stan Gable, are irked by the nerds’ success, and Stan sets his fellow members to pull pranks against the nerds. The nerds try to get campus police to help, but the campus cops are constrained by the Greek Council that adjudicates all such pranks, of which Stan is currently president. The nerds decide to seek membership on the Greek Council by joining a national fraternity. The only one that considers them is the black fraternity Lambda Lambda Lambda (Tri-Lambs), led by U.N. Jefferson. Jefferson is wary of their application but agrees to a probationary period. The nerds set up a large party with the Omega Mu sorority, similarly made up of nerds, including Gilbert’s girlfriend Judy, and invite Jefferson to attend. The party is dull until Booger provides them with high quality marijuana. The Alpha Betas and the Pi Delta Pis, the sorority which Stan’s girlfriend Betty Childs belongs to, then disrupt the party by bringing and releasing pigs. The nerds exact revenge on both groups by pulling similar pranks. Jefferson is impressed with the nerds’ tenacity and grants them full membership.
The nerds then appeal to the Council, but Gable is dismissive. The nerds realize the only way to get the Council to help is to put one of their own in as president, which they can do by winning the Greek Games during Homecoming. Partnering with the Omega Mus and using their extensive knowledge, the Tri-Lambs compete strongly with the Alpha Betas/Pi Delta Pis during the athletic events. At the charity fundraiser, the nerds heavily outsell the Alpha Betas by offering pies with naked pictures of Betty and other Pi Delta Pis on the bottom. During this, Lewis, who has fallen in love with Betty, steals Stan’s costume and tricks Betty into engaging in sexual intercourse with him. She is surprised when Lewis reveals his identity, but admits he was “wonderful”, and is not angry. Finally, the nerds dominate the musical competition with a techno-computer-driven musical production, winning the overall games. Lewis immediately nominates Gilbert as the new Council president.
Coach Harris lambastes the Alpha Betas for losing to the nerds, and Stan leads them in vandalizing the Tri-Lamb house. The nerds become despondent, and Gilbert decides to barge into the middle of the Homecoming Pep Rally to address his complaints. The Alpha Betas try to stop him, but Jefferson and a group of national Tri-Lambs arrive to intimidate the Alpha Betas, giving Gilbert the opportunity to give a rousing speech about standing up to discrimination. Lewis and the other Tri-Lambs, many alumni, and Betty, who announces she is “in love with a nerd”, join in cheering Gilbert, soundly shaming the Alpha Betas. Dean Ulich instructs Coach Harris that the Tri-Lambs will now live in the Alpha Beta house, while the Alpha Betas will live in the gym until they can repair the Tri-Lamb house.