Those summer nights are still alive for the duo, who have reunited in song for the first time with a Christmas charity album, This Christmas.
TheFIX caught up with the chummy duo about their musical reunion and the secret behind their sizzling on-screen chemistry.
"I had known Olivia prior to Grease," John told TheFIX over the phone from LA. "Because she was the biggest recording artist in the world at the time. But I also had a tremendous crush on her!"
"I championed her for this part. I felt like there was no-one else in the world that could've done it."
The admiration was mutual. "We both had a crush on each other," Olivia told TheFIX. "It created great chemistry."
Olivia recalled the first time she met her Danny Zuko, hot on the heels of his Saturday Night Fever success.
"John walked up my driveway in Malibu and he was gorgeous, and he had these bright blue eyes, which he still has, and I was captured by him," Olivia revealed.
"He was so sweet and nice, and I was very nervous about making a movie and he convinced me that yes, I should do a screen test … and we did the screen test and it was great and here we are!"
It was the success of 'You're the One That I Want' that brought Olivia and John back together to make their yuletide record, This Christmas.
Olivia texted John recently to tell him their Grease hit was the highest selling duet of all time. The pair vowed to make a Christmas album together, reuniting with their 'You're the One That I Want' songwriter John Farrar for an original song, a kind-of sequel to their mega-hit, titled 'I Think You Might Like It'.
"It was a very important song for us, and the audience because it's new," John said. "We need new Christmas songs."
The rest of the album is a Christmas bonbon of festive classics such as 'Rockin' Around the Christmas Tree', 'Silent Night' and 'White Christmas'. High-profile including Barbra Streisand, Tony Bennett, Cliff Richard,James Taylor and saxophone god Kenny G helped out.
"Most things are come and go with music, but Christmas CDs continue," John said.
"You tire of other songs, but you don't tire of that. Grease is like that too, a lot of people never tire of it. And you don't tire of Christmas music."
All of the album's proceeds will go to charities close to John and Olivia's hearts: John's Jett Travolta Foundation helps children with disabilities, including autism and seizures, honouring his late son who died from a seizure in 2009.
For cancer survivor Olivia, the funds will go to the Olivia Newton-John Cancer and Wellness Centre in Melbourne, which helps with cancer research and treatment.
"The wonderful thing about it is that, (a), We had fun making it, and (b), the money generated from this will go on every year at Christmas, and it will go on forever and forever," Olivia concluded.
Any chance we'll see Olivia and John in a Grease remake next?
"I don't know about a remake of Grease," John said. "It's such an iconic, classic piece I think sometimes you leave those alone … you do something else. Like a Christmas CD, with a music video attached!"
Look out for the music clip for 'I Think You Might Like It', or have a listen in the video above. This Christmas is out now, buy on iTunes here.