The ending. Before running off to enjoy the rest of the summer with his friends, TJ shares a genuinely tender moment with Principal Prickly—climaxing with Prickly calling him "Teej", and TJ calling Prickly "Pete".
"You did me a big favor dragging me into this, Detweiller. I didn't get into teaching for the promotions or the pension plan or so I could be at the golf course by 3 PM. I... did it because I wanted to help you kids. I'd forgotten that... until today."
The last scene of the movie with T.J and friends running off to enjoy summer vacation together, with "Let The Sunshine In" playing in the background, and Prickley digging out his old peace symbol medallion and hanging it around his neck for the first time in decades.
During the final shot of Third Street, you can see a small part of the school's paint job from the 60s still remaining
The gang meeting with TJ in his treehouse after they all manage to sneak out of summer camp to be with him. It climaxes with them sharing their favorite summer memories together over a bowl of ice cream. Awwww...
Not to mention, he finally DOES get to make those memories with the gang, as they rush off to what may or may not be the last summer of childhood.
The gang singing "John Jacob Jingleheimer Schmidt" together.
Made all the more heartwarming by the fact that TJ's older sister, Becky, was the one who taught it to them...back when she was younger, and wasn't ashamed of being seen with kids.
Principal Prickly's speech which manages to convince TJ not to give up saving summer vacation, while revealing the fact that Prickly himself was once a carefree kid just like TJ. Doubles as a Tear Jerker.
Prickly: I'll let you in on a little secret, Detweiller. Every adult you've ever known was a kid at sometime in his life. You think we don't remember summer vacation? Riding our bikes down the creek. Catching polliwogs in a jar. Camping out under the stars. Well you're wrong! Sometimes I sit there in my office, looking out at you kids in the playground and I think, "They don't know how good they got it. In a few years, they'll be grownups like me and all those good times will be memories for them, too". So go ahead. Put a whoopie-cushion in my chair. Put fake vomit on my carpet. Make fun of my "big, saggy butt". But don't ever say I don't care about summer vacation, 'cause those memories are the last part of childhood I got left.
Most of the teachers' reactions to the kids leaving are pretty indifferent. Miss Grotke on the other hand, is crying. D'aww.
TJ's friends call his older sister, Becky, to get help, but she's still mad at TJ for blackmailing her into driving him around, and yells "Give me one good reason why I should help! Just one!" Mikey, dead serious, responds with this: "Because he's your little brother, and he needs you." There's a pause, followed by Becky saying that she'll be right over.
A little twisted due to coming from an unrepentant villain, but the fact that Benedict is still in love with Miss Finster, even though she has now gotten old and, to be honest, rather ugly. Of course, she still rejects him because he's still a kid-hating fascist.
Building on that, the teachers rushing to the defence of both their students and summer vacation itself.