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In 1978, Ron Burgundy is the famous anchorman for a local San Diego television station, fictional KVWN channel 4. He works alongside his friends, whom he had known since childhood, on the news team: lead field reporter Brian Fantana, sportscaster Champ Kind, and meteorologist Brick Tamland. Station director Ed Harken informs the team that they have retained their long-held status as the highest-rated news program in San Diego, leading them to throw a wild party, where Burgundy unsuccessfully attempts to pick up a beautiful blonde woman, Veronica Corningstone. Harken later informs the team that they have been forced to hire Corningstone. After a series of unsuccessful attempts by the team to seduce her, she finally relents and agrees to a "professional tour" of the city with Ron, culminating in a sexual relationship. Despite agreeing to keep the relationship discreet, Burgundy announces it on air.

After a dispute with a motorcyclist ends in Burgundy's dog Baxter being punted off the San Diego–Coronado Bridge, Burgundy is late to work. Corningstone fills in for him on-air, receiving higher ratings than Burgundy usually receives, and the couple breaks up when Burgundy bemoans her success. Corningstone is promoted to co-anchor, to the disgust of the team. The co-anchors become fierce rivals off-air while maintaining a phony cordiality on-air. Depressed, the team (barring Corningstone) decide to buy new suits, but Tamland, who was leading the way, gets them lost in a shady part of town. Confronted by main competitor Wes Mantooth and his news team, Burgundy challenges them to a fight. When several other news teams converge onsite, a full-on melee battle ensues, only to be broken up by police sirens that cause them to flee. Realizing that having a female co-anchor is straining their reputation, Burgundy gets in another heated argument with Veronica, and they get in a physical fight after she insults his hair.