The story takes place in the dance-crazed town of Snaphappy, Ohio, in May of 1995. The entire town is gathering at the "May Day Celebration," where Delaney Duzwell, the happiest of all of Snaphappy High kids, takes to the town center's stage and gets everyone literally dancing in the streets (“Dancing in the Streets”).

“Nobody can deny” that the long-time mayor, Pete Lightfoot, a widower, and his son, Chad, are loved by all AND the center of this "May Day" gathering. It’s also the fist time that the town of Snaphapy is meeting the Mayor’s new wife, Mona Lightfoot.

In an effort to welcome the new Mrs. Lightfoot to Snaphappy, Delaney, Chad, Lucas, Emma and all of the high school kids get up and perform (“Your Mama Don’t Dance”).

Unfortunately, Mona is taken aback. “How could they all know?” To everyone’s surprise, in the middle of the number, Mona suddenly runs over to the sound system and unplugs everything.  The performance stops and the stage freezes as she utters, “Whoops.” She confesses to the audience that she's terrified of dancing ("Why Can't I Dance"). 

As the town center park clears (“Dancing in the Street – Reprise”), the slightly embarrassed Mayor and his new wife head for home while Chad and Delaney linger and begin to talk.

Chad tells Delaney that Mona wants to impose a curfew on him. Delaney proposes a dance to cheer him up (“Do You Want to Dance? – Ballad”). Sparks fly as they dance, and they resolve to make things right with Mona together.

Of course, this being the dance-crazed town of Snaphappy, this intimate moment is soon crashed by everyone joining in.

As Chad arrives back home, Mona gets a "crazily delicious idea." She announces to both of them that she wants a TAX put on all dancing in Snaphappy, claiming it will raise more money for the town. The Mayor and Chad are shocked. But, wanting to ease the tension, the Mayor reluctantly agrees. Mona Lightfoot’s plan is in place.

The next day, the Snaphappy Herald proclaims: “Dance Tax Hits Snaphappy." Can it be that anyone caught dancing who does not pay the tax will be sent to jail? As all of the Snaphappy High Kids and Townsfolk hear the news, they gather in disbelief. The kids decide they need to take action.

They all rally, singing and dancing in protest (“Neutron Dance”). Just as they get into a dancing frenzy, sirens sound, the police are called and all of the kids are hauled off to jail for illegal dancing.

Moments later in the D-D-D Dance Studio, Don Duzwell, Delaney's father, gets a call about how the all of the kids have been hauled off to jail, just as his wife (and Delaney's mother), Daphne, begins teaching their nightly dance class. Mona sneaks into the studio, spying on the class. As Daphne sings and the entire class dances, Don tries frantically to get her attention (“Boogie Wonderland”). Finally, when Don yells out that Delaney and other kids are in jail, the dance floor comes to a stop. All of the parents run out and head to the police station.

At the police station, the kids are still angry, even after their “dance tax” fines have been paid. They continue complaining to Officer Carlise as they sit in jail (“Dancing in the Streets – Protest”). While the kids want to keep protesting, their parents have a different idea, and all of the kids, one by one, are scurried off to their respective homes. 

When Chad gets back home, Mona, in her anger, gets another "idea:" the dance tax should be tripled. Mayor Pete and Chad are shocked, but Mona is insistent. The Mayor tries to get Chad to give Mona a chance, but Chad angrily claims he wants his "real" mom back.

At the same time, back in the town square, Emma starts to teach Lucas how to dance by relating it to something he knows... sports.

The next week, life is a little different for Don and Daphne at the D-D-D-Dance Studio (“Shake Your Groove Thing / Shake Your Booty”). Mona spies from the corner. Because of the severe new "dance tax," their dance studio is a quarter of the size that it used to be, but their adult students still crowd in and proceed to “shake, shake, shake their booty.”

Outside the studio, Delaney, Chad and a bunch of the kids wait for their parents' dance class to end. Delaney mentions that no one has ever seen the Mayor’s wife dance and proposes that maybe Mona just can't dance. 

Delaney, always trying to keep everyone’s spirits high, steps up and makes the kids realize that there is “dance” in everything that they do. Before the kids know it, they are "busting a move" to the basketball, football, marching and cheering movements that they do every day (“Bust a Move / Jam”).

Feeling a lot better, Chad calls a huddle and hatches a plan to display a different kind of "dancing" at the upcoming graduation ceremony. A senior class dance had always been a tradition at Snaphappy High, but Mr. Wizzle, the principal, had cancelled it because of the expense. If their plan works, the kids will have everyone up on their feet, "jamming" and celebrating at the graduation.

Mona finally breaks down and tells the Mayor why she hates dancing so much. In a flashback, Mona explains that her mother had been a serious dance teacher, and Mona’s dancing could never please her. The Mayor is stunned by what he hears but now understands what is driving his wife to rid Snaphappy of dancing. Unfortunately, Chad walks in at a sensitive moment, and another argument ensues. Chad walks out, threatening not to show up for graduation.

The big graduation day arrives for all of the Seniors at Snaphappy High (“Pomp and Circum-Dance”). Chad is nowhere to be seen. Delaney speaks to all of the graduating seniors. After some pleasantries, she acknowledges that, because they can’t afford their traditional dance celebration at graduation this year, the students have prepared a little presentation to commemorate this year’s festivities. Chad rushes in, just in the nick of time. They all take off their robes to reveal athletic wear. They begin doing exercise moves, jumping and throwing and catching balls, to everyone’s surprise (“Walking on Sunshine”).

This outrages Mona so much that she runs up to the DJ and demands that he turn the music OFF! Suddenly, the DJ starts playing a new song (“Dancing Machine”). As an outraged Mona moves about, flailing her arms and legs, the entire crowd starts to pick up on her “moves” and duplicates them like one giant line dance. They’ve never seen anything like it. They love her dance style. To her surprise, everyone is singing and dancing to “her dance.”

The Mayor turns to his wife and asks, “Do you wanna dance?” (“Do You Want to Dance – UpTempo”). With a miraculous change of heart, she yells, “Let’s do it!” Everyone in Snaphappy is overjoyed and dances the night away.