School's out at Third Street School, but T.J. is unhappy, because his friends are all at summer camps in order to prepare for their future careers. Later, T.J. suspects that there's something going on inside the school after seeing a green light pour from the cafeteria and getting chased off by a guard. He sneaks around and sees a tractor beam levitating a safe. Panicking, he tries to tell his parents and the police, but no one believes him. When he gets Principal Prickly to come to see what's going on, he is dematerialized. Out of options, T.J. uses his sister Becky's diary to blackmail her into driving to all the camps to pick his friends up.
T.J. and his friends steal a box of documents, but when they find it filled with boring information, they accuse him of inventing a plot to drag them out of summer camp. However, their accusations are undercut by a tractor beam appearing and firing off from the school's roof, and agree to help T.J investigate at night. The next day, T.J. finds Pricky's golf pants in a dumpster with a note requesting help in a pocket, so T.J. and his friends infiltrate the school that night to find Prickly. They witness the adults in the auditorium firing the tractor beam at the moon but are caught spying and flee. T.J. is captured and his put in a storage room where Prickly is tied up. A man named Dr. Phillium Benedict comes in to talk to them, revealing himself to be an old friend of Prickly's from their early teaching years.
After Benedict leaves, Prickly tells the story of how, back in the spring of 1968, Benedict became principal of Third Street School and moved to abolish recess in an attempt to improve test grades. The plan didn't go over well, as it was met with angry parents protesting to reinstate recess, which Benedict refused to do. Prickly went to the superintendent as a means of recourse. While the superintendent assured the parents that the plan Benedict made would never be carried out, Benedict still refused to back down. The superintendent then demoted Benedict and promoted Prickly to principal. Benedict accused Prickly of stealing his job, which, along with his anti-recess views, caused his then-girlfriend, Muriel P. Finster to break up with him. Infuriated, Benedict ended his friendship with Prickly, quit teaching, and swore revenge on his now-former friend. Later, Prickly says, Benedict entered politics and went on to become Secretary of Education, but was fired by the president when he tried to abolish recess nationwide.
T.J. and Prickly escape and enter Prickly's office where T.J. uses his confiscated walkie-talkie in Prickly's drawer to tells his friends about Benedict's plans to destroy summer vacation. T.J.'s friends go through the box of documents again. Spinelli finds a date book that mentions lunar perigee, and Gretchen deduces that Benedict is trying to move the moon's orbit via tractor beam when it is closest to the Earth. By drastically altering the moon's orbit, Benedict, having cornered T.J. and Prickly, reveals to them that he can create a permanent ice age so kids will spend their summers studying inside instead of playing.
T.J.'s friends get his sister, Becky, to drive to the camps again, where they pick up all the children. Gus draws up the plans to attack the school while T.J. and Prickly escape the cage that Benedict has imprisoned them in. Gus' plan works, and most of Benedict's mercenary guards and ninjas are incapacitated. All the kids pour into the auditorium. Another set of guards protects Benedict as he prepares to pull the lever. However, Muriel P. Finster arrives. After rejecting Benedict again, she brings the teachers in and a fight breaks out. Prickly punches Benedict, but as Benedict slumps, he triggers the beam and Prickly cannot reverse it. T.J. tosses his baseball to Vince, whose accurate pitch destroys the beam's core. The police arrest Benedict and his cronies for theft, breaking and entering, and attempted terrorism.
In the aftermath, T.J. is celebrated as a hero and makes amends with his sister. T.J.'s friends decide to spend the rest of the summer with him, stating that they have plenty of time to prepare for their futures, but only a little time left to just be kids. Before they head to the pond, T.J. thanks Prickly in person for protecting him from Benedict during their imprisonment. Prickly states that he should be the one doing the thanking, as T.J.'s act of dragging Prickly into the whole ordeal reminded him of his true motivation to pursue teaching: to help kids. They acknowledge each other in mutual respect by using their respective nicknames. As T.J. heads to the pond with his friend, Prickly shouts at him that when September comes, T.J. will be under Prickly's discipline again, but T.J. replies that September is a long way off. The film ends with T.J. and his friends racing to the pond, with Prickly looking on and smiling.
- "Dancing in the Street" - Martha and the Vandellas - 2:38
- "Born to Be Wild" – Steppenwolf - 3:27
- "One" – Three Dog Night - 3:01
- "Incense and Peppermints" – Strawberry Alarm Clock - 2:46
- "Wipe Out" – The Surfaris - 2:37
- "Nobody But Me" – The Human Beinz - 2:14
- "Aquarius/Let the Sunshine In" – The 5th Dimension - 2:29
- "Green Tambourine" – The Lemon Pipers - 2:36
- "Recess Suite" – Denis M. Hannigan - 5:07
- "Dancing in the Street" – Myra - 3:57
Note: "Purple Haze" by Jimi Hendrix was also used in the film, though it is not included on the soundtrack.
Rotten Tomatoes, a review aggregator, reports that 61% of 69 surveyed critics gave the film a positive review; the average rating is 5.8/10. The site's consensus reads: "Though basically a TV cartoon stretched out to movie-length, Recess has enough successful jokes and smart writing to make it a worthwhile view."
The film earned $36,706,141 in North America and another $7,754,709 from other countries. The worldwide gross was $44,460,850, against a $23 million budget.
Recess: School's Out, was released on VHS and DVD on August 7, 2001.