Tom has rather abruptly fallen in love with someone he met during their battle with giant alien cockroaches, and has stopped travelling with Iris and Panda. Iris is thus in a nostalgic mood when she happens to tune in to Radio Yesterday, a golden oldies station broadcasting to the human space colonies. Panda is not impressed by the tunes of Dusty Springfield and Petula Clark, but Iris, inspired by the power of cheap music, decides to visit Radio Yesterday and offer her services as a special guest stare, on the grounds that she's met most of the people on the station's playlist and would be a prize subject for an interview.
Radio Yesterday's DJ and manager, Sam Gold, appears chipper and enthusiastic on air, but once the microphones are off he becomes a despairing, worn-out shell of his former self. The station is run-down and decrepit; there's an odd bubbling sound in the air vents, and the mixing desk frequently screeches with feedback. The young station researcher, Leeza Lewis, still dreams of stardom, but Sam cynically warns her that everyone loses their dreams in the end. As he settles in with a bottle of Jack Daniels and tries to forget the woman who reduced him to this state, Leeza returns to work, singing to cheer herself up -- and trying to ignore the bubbling voice from the air vents that's reminding her of the bargain she's made.
Iris's bus materialises on the station, and the station synthellect, Janis -- an artificial intelligence with the personality of a stoned, laid-back hippie -- directs Panda and Iris to reception. From there, Leeza directs them to the green room, where Iris introduces herself to the stunned Sam -- who reveals that he already knows her, because he's her husband. Panda takes some glee in Iris's monumental social gaffe, and when both Sam and Iris tell him to shut up, he stalks out, offended, to try to chat up Leeza. Meanwhile, Janis reports to Leeza that the feedback whines from the mixing desk are being caused by subspace interference, but that she can't detect the malfunction in the air conditioning. As soon as Janis has signed off, however, a Naxian warlord named Mohanalee emerges from the air vents and reveals that he's changing the terms of his agreement with Leeza; their plans are nearing completion, and he needs Leeza to be his ears, to find out whether the newcomers pose a threat...
Iris is terribly apologetic when she realises what she's done to Sam. On the night of their wedding, she was taken out of Time by the Master Bakers of Barastabon and sent on a mission to reassemble the six lost slices of the Celestial Gateaux, and she never got around to going back to him. This was six months ago in Sam's life and several years ago in Iris's. Despite his frustration and anger, however, Sam finds it in himself to forgive her, and soon they're sharing drinks from his secret cabinet and laughing over old times. Iris admits that she's been having memory troubles, and that she came to Radio Yesterday because the broadcast had reminded her of something; but the station is rather disappointing in reality. Sam admits that they can't afford the rights to most of the original music and must therefore broadcast cheap knock-offs written by Janis; depressingly, most of the galaxy can't seem to tell the difference. Iris thus suggests that Sam give his viewers a shock by interviewing her.
Leeza joins Panda in reception, where she allows him to sit on her knee while she plies him with alcohol. Panda succumbs to her flirtation and tells her about the bus, and she admits to him in turn that Radio Yesterday is just a stepping stone for her; she intends to go on to bigger things. She leaves to find more alcohol, although Mohanalee warns her not to drink too much herself, as it interferes with the bonding process. While waiting, Panda grows irritated by the bland music and whines of feedback, and enters the studio to turn the station's speakers off. While doing so, he drops his whiskey bottle, and discovers something gross and wet stuck to the bottom of the mixing desk while trying to retrieve it. He hides under the desk when Leeza arrives, concerned that she'll be upset if she catches him here -- and Leeza drops her flirtatious act and orders Janis to locate him. She is unable to do so, as the bus's systems have scrambled the station's sensors so that Panda and Iris can walk about unnoticed; in any case, she's busy trying to fix the squeals from the mixing desk. Leeza contacts Mohanalee to warn him that Janis is close to discovering the Naxian sub-signal, but he assures her that his brethren will soon be within striking distance. Unfortunately, Panda then hiccoughs, giving himself away. Leeza restrains him, and Mohanalee bubbles out of the air vents, identifying himself as the warlord of the Naxians, humanity's new masters.
Iris and Sam arrive in the studio to begin their interview, and Iris takes one look at Mohanalee and chucks her bottle of champagne at him. His skin begins to burn and he retreats into the air ducts, although Iris admits that she was just throwing alcohol about at random as she usually does. Sam ties up Leeza, whose ear falls off and tries to crawl away of its own accord. Iris traps it under a glass, and she, Sam, and Panda retreat to discuss what's happening. Mohanalee returns to the studio, releases Leeza, and informs her that he is altering the terms of their contract; the Naxian strike force is on its way, but they have a new objective now. Leeza will still become the most famous singer in the Naxian Empire, but under different circumstances than she was expecting.
Janis analyses Leeza's detached ear and confirms that it's not human; the Naxians have replaced her real ears with alien tissue. Another whine of feedback squeals out of the speakers, and Iris and Sam give up all hope, accepting that they're out of their depth and that the Naxians are bound to win. Panda realises that the feedback whine is being caused by the sub-signal that Leeza mentioned; the Naxians are transmitting a mood-altering harmonic through Radio Yesterday, and the feedback is the result of technological incompatibility. The Naxians altered Leeza's ears to make her immune, and the signal doesn't affect polyester-based life forms such as Panda; however, everyone else who has been listening to Radio Yesterday has become depressed and resigned to their fate. This is why Sam has fallen into such a funk and why nobody has bothered to complain about the station's bland music. Soon the Naxians will invade the galaxy, and humanity will be too depressed to fight back.
Iris, Panda, and Sam return to the studio to investigate the weird thing Panda spotted under the mixing desk. Iris deals with the immediate problem by smashing it with a mallet, but Janis then reveals that a Naxian scout ship is approaching the station, which has no way of defending itself. Iris pulls Sam out of his despair by reminding him that he was brave enough to marry her, and takes the Naxian xenotech to Janis's computer core while Sam tries to warn Earth of the danger. However, Leeza confronts Sam, sporting fresh scars on her throat where Mohanalee has made further grafts onto her flesh. She's always wanted to be famous, and when the Naxians take over the galaxy, she will finally become a star. Leeza begins to sing, and her augmented vocal cords replicate the effect of the sub-signal's bad vibrations -- but Sam fights back by mixing together all of the novelty songs in the station's archives into one big mega-mix and blasting it through the speakers, fighting sound with music.
Iris augments Janis's programming, enabling her to repair the Naxian device and turn it against the invaders. As she works, Janis detects serious interference in the studio, and Iris leaves the work to Janis and Panda while she tries to rescue Sam. The studio explodes before she gets there, and she crumbles in despair, blaming herself for Sam's death -- until Sam appears, revealing that he set the mixing desk to overload and fled while Leeza was incapacitated by the mega-music mix. In the confusion, however, the Naxians have docked with the station, and they now capture Sam and Iris. Leeza leads the Naxians to Iris's bus, where Mohanalee reveals that they have changed their plans. They will now force Iris to transport them back to the 1960s, the golden age of human pop music; there, using Sam's encyclopaedic knowledge of pop, they will produce all of the era's hit singles for Leeza herself, who will use her augmented vocal cords to embed the Naxian sub-signal in all the most popular music of the time. Leeza will become a star, and 1960s Earth will become the new throneworld of the Naxian empire.
Leeza uses her augmented singing voice to override Sam and Iris's will and force them onto the bus. Mohanalee accompanies them, ordering the other Naxians to remain and ensure that nobody interferes in their attempt to rewrite history. Iris pilots the bus to the Swinging Sixties, and once they arrive, Mohanalee orders Leeza to dispose of her, as he's watched her drive the bus and believes he can now do so himself. However, Leeza is staring about herself, awed by the life and passion of the world around her. Iris manages to get through to her buried humanity, and Leeza finally realises that she's become part of a plot to destroy all of this beauty. Sam promises to cut a disc for her when they return to their own time so that she can become a star on her own merit. Unable to stand the confusion in her mind, Leeza screams aloud, turning the power of her biosonics on Mohanalee, whose body explodes. Sam leaps forward and takes the brunt of the blast, shielding Iris; as he dies, he tells her that she always had too much love for just one man. Leeza is horrified by what she's done, but after a moment of grief, Iris decides to forgive her, since she made the right choice in the end. But before they can board the bus, the dying Mohanalee takes his revenge as his last act, punishing Leeza for breach of contract by ordering her augmented vocal cords to strangle her to death.
Back on Radio Yesterday, Janis and Panda have finished wiring Leeza's ear into the Naxian subliminal transducer. Panda manages to crawl through the ventilation shafts on his own without Iris to help him. The Naxians are preparing to move out from the reception area and secure the station, but before they can do so, Panda and Janis activate the reprogrammed subliminal transducer, and the Naxians are overcome by a wave of depression so powerful that they throw themselves out of the station's airlock en masse. Iris then returns, alone and very upset, but after a moment's pause, Panda begins complaining loudly about being abandoned to sort out the Naxians himself. This is just what Iris needed to pull herself together, and she gives Panda a hug and prepares to organise the biggest, booziest funeral in history to honour Sam Gold.