Before the show begins, a pirate sits down on part of the stage as the audience is taking their seats. The pirate is revealed to be SpongeBob's number one fan, Patchy, who has traveled from Encino, California to catch the premiere of SpongeBob's musical. Two security guards appear and tell Patchy to leave the stage, as the show is about to begin. Patchy objects, but the guards lead him out of the theater as Patchy claims he is a victim of pirate discrimination and sings the protest song "Yo Ho, We Won't Go". One of the security guards apologizes for the interruption, then tells the audience to enjoy the show.
SpongeBob SquarePants awakens and happily welcomes the day with his pet snail, Gary ("Bikini Bottom Day"). He greets various friends in his hometown of Bikini Bottom—including his best friend Patrick, his neighbor Squidward, and his squirrel friend Sandy Cheeks—as he walks to the Krusty Krab restaurant. At work, his boss Mr. Krabs tells his whale daughter Pearl she will manage the restaurant one day. With Pearl uninterested, SpongeBob hints that he dreams of being the manager. Mr. Krabs laughs at the idea, telling SpongeBob he is "just a simple sponge" and could not handle the position ("Bikini Bottom Day Reprise 1"). The day continues uneventfully until a violent tremor suddenly rocks the entire town.
The mayor announces all citizens should return to their homes. A television news report reveals that the tremor was caused by a nearby volcano that will erupt ("No Control"). SpongeBob checks up on Patrick, who is upset over the emergency. To cheer him up, SpongeBob reiterates that they are best friends forever ("BFF"). With the town in a panic over the impending doom, married villains Plankton and Karen try to convince the citizens to enter an escape pod that will take them away from the volcano. But, the two have a secret scheme planned. Once the residents are inside, they will hypnotize them into liking the chum that they serve at their restaurant, the Chum Bucket ("When the Going Gets Tough"). The townspeople, unknowingly, support this idea and decide to hold a last-minute music concert to raise money for the transport. Squidward, who dreams of getting to perform his own one-man show, is immediately shut down when he brings it up. Instead, Pearl suggests that the famous rock band, the Electric Skates, plays at the concert. Everyone agrees and Squidward is named manager of the event.
SpongeBob, however, is against the idea of leaving town and believes the citizens should fight to save Bikini Bottom. SpongeBob thinks back on Mr. Krabs' words from earlier and wonders if he could really save the town ("Just a Simple Sponge"). He decides that he can think of a solution with the help of Patrick and his squirrel friend Sandy. Together, the three could build a device that could stop the volcano. Mr. Krabs sees the upcoming disaster as a money-making opportunity, holding an "apocalypse sale" on his signature fast food dish, Krabby Patties. Pearl worries about her father's obsession with money, believing that it overshadows his care for her ("Daddy Knows Best").
Meanwhile, SpongeBob convinces Patrick and Sandy to team up, climb the volcano, and stop it from erupting with an invention Sandy will build. Sandy has smarts and Patrick has strength, but SpongeBob does not know what he can contribute. Regardless, the friends are determined to succeed ("Hero Is My Middle Name"). Before they can start their plan, a group of cultist sardines appear. They found wisdom in Patrick's simple thoughts at the town meeting and decide to make him their new leader ("Super Star Sea Savior"). Patrick likes the idea and decides to back out of SpongeBob's plan so that he can bask in self-glory, angering SpongeBob. The two fight and end their "BFF" status. After Patrick leaves, Sandy reminds SpongeBob that things are bound to be okay. The entire company reveals their personal thoughts and feelings about the impending disaster ("Tomorrow Is").
After intermission, Patchy again sneaks onstage, telling the audience that pirates are persecuted by others because of stereotypes ("Poor Pirates"). Once again, security intervenes to chase Patchy away. SpongeBob wakes up and greets a new day: the day when the volcano is expected to erupt ("Bikini Bottom Day Reprise 2"). Bikini Bottom has fallen into anarchy and chaos: the mayor has employed a dictator-like rule over the people and an angry mob has started to hunt down Sandy, thinking her scientific achievements are the cause for the volcano's impending eruption. Sandy is able to hide from the mob and show SpongeBob her invention, the Eruptor Interrupter. They plan to throw it inside the volcano and save the town.
Back in Bikini Bottom, the Electric Skates finally arrive ("Bikini Bottom Boogie"). Squidward asks if he may perform with them as an opening act. The band will only allow it if Squidward buys every item on a ridiculously long shopping list. Meanwhile, SpongeBob and Sandy make their way up the volcano with great difficulty. Sandy tries to lift their spirits by reminding them of what they have learned in karate class about never giving up ("Chop to the Top"). When they stop to rest, SpongeBob cannot help but think of how he misses Patrick and wishes he was there to help them. In Bikini Bottom, Patrick finds life as a guru unexciting and misses SpongeBob as well, prompting him to leave his followers behind to help SpongeBob ("(I Guess) I Miss You").
Squidward obtains all but one of the items on the Electric Skates' list (seahorse radish), so the band refuses to let him perform despite his pleas, calling him a "loser" in the process. Their use of this word causes Squidward—constantly called a loser in childhood by his classmates—to snap back at the band in anger, and they end up quitting. Now alone, Squidward insists that he is not a loser and performs a show-stopping song with a tap dance number and a back-up chorus in his imagination ("I'm Not a Loser"). Back on the mountain, SpongeBob starts to fall when Patrick saves him with a jetpack Sandy invented. The two reaffirm their friendship and follow Sandy to the summit of the mountain. When they reach the top, neither Sandy nor Patrick are able to reach the rim where they need to throw the device in. They turn to SpongeBob, who doubts his skills ("Just a Simple Sponge Reprise"). They remind him that he is the only one who can squeeze through tight areas and that his optimism has gotten them this far. With new determination, SpongeBob throws the Eruptor Interrupter in. They head back to Bikini Bottom and wait to see if their plan will work.
In Bikini Bottom, the entire city is in anarchy. Since the band is gone, there will be no concert and no escape pod. SpongeBob tries to calm everyone down, insisting that whatever happens, they have each other ("Best Day Ever"). When the time comes for the volcano to erupt, everyone braces for their deaths. The time passes without an eruption, signaling that the Eruptor Interrupter has worked. With Bikini Bottom safe, everyone decides that they should celebrate by having a new concert with Pearl as the lead vocalist. Patchy descends from above on a rope, having finally managed to sneak into the show, and joins in ("Bikini Bottom Day Reprise 3"). During the curtain call, the cast performs the ("SpongeBob SquarePants Theme Song").
Check back soon when libretto and/or lyrics for SpongeBob SquarePants: The Broadway Musical becomes available.