Six months after the events of the first film, journalist Rachel Keller and her young son Aidan have fled Seattle to escape the curse of the deadly videotape associated with the vengeful ghost Samara. Hoping for a fresh start, they settle in the small coastal town of Astoria, Oregon, where Rachel takes a job at the local newspaper. Their hopes for a normal life are shattered when a local teenager is found dead under circumstances identical to the tape's victims, his face frozen in a mask of sheer terror.

Rachel retrieves and destroys the new copy of the tape, but this action fails to stop the threat. Samara, the ghost of a girl who was murdered and thrown into a well, is no longer bound by the seven-day curse and is now more determined than ever. Instead of simply killing viewers, Samara seeks to possess Aidan, using him as a vessel to return to the world. As Samara's influence grows, Aidan begins to exhibit increasingly disturbing behavior, develops a supernatural cold, and displays a psychic connection to the vengeful spirit.

As her son's condition deteriorates, Rachel investigates Samara's origins more deeply. Her search leads her to a psychiatric hospital where she finds Evelyn, Samara's biological mother, played by Sissy Spacek. Evelyn reveals that she tried to drown Samara as an infant because she recognized the evil within her, offering Rachel a horrifying glimpse into the ghost's past. Meanwhile, Aidan is hospitalized after authorities mistake his strange symptoms for child abuse, and Rachel must race against time to save him from the spirit trying to consume him from within.

The conflict culminates in a desperate confrontation where Rachel enters a television set to follow Samara back into the dark, waterlogged well that has served as her prison. In a final struggle for her son's soul, Rachel seals the well, trapping Samara inside and breaking her hold on Aidan. The film ends with mother and son driving away, having once again survived the supernatural cycle of terror.