University students Yuri Kurahashi and Natsumi Ueno purchase a used VHS player to transfer a wedding tape to DVD. Inside the player, they discover an unlabeled videotape. Curious, Yuri plays it, but gets distracted by her phone, leaving Natsumi to watch the entire thing. The footage is an updated version of the infamous cursed videotape, showing a decrepit building instead of a well, and the deadline for the curse has been shortened from seven days to just two. Soon after, Natsumi receives a disturbing phone call and sees the ghost of Sadako Yamamura in the room. Desperate, the girls seek help from their professor, Morishige, an expert in urban legends who is obsessed with meeting Sadako. He eagerly watches the tape himself and takes the girls to a powerful exorcist. The exorcism goes horribly wrong, resulting in the exorcist's death and Morishige being killed after Sadako possesses Natsumi and forces the professor's assistants to commit suicide. In her final moments, the exorcist tells the girls to seek out a psychic named Keizo Tokiwa.

In a separate story, high school student Suzuka Takagi moves with her family into a new home across the street from the infamous, decrepit Saeki mansion. Suzuka begins having terrifying nightmares about the house and feels it calling to her. After a group of bullies force a schoolboy to enter the house, all of them are violently killed by the spirits of Kayako and Toshio Saeki. Believing she sees one of the missing children inside, Suzuka enters the mansion. She encounters Toshio, and her parents, who rush in after hearing her screams, are murdered by Kayako and Toshio. Keizo Tokiwa arrives in time to save Suzuka, but she is now cursed by Kayako.

Keizo is a lanky, unorthodox psychic accompanied by Tamao, a blind young girl with powerful psychic abilities. He reveals that the only way to permanently destroy both curses is to pit them against each other. He theorizes that if a single person is afflicted by both curses, Sadako and Kayako will be forced to fight over the soul, hopefully obliterating each other in the process. Yuri, who has now watched the tape to try and save Natsumi, and Suzuka agree to the plan. They enter the Saeki mansion, where Suzuka watches the cursed videotape, and Yuri sees Kayako, making them both carriers of the dual curses.

The plan unfolds inside the Saeki house. Toshio appears, only to be dragged into a television set by Sadako's prehensile hair. Sadako then begins to crawl out of the TV while Kayako descends the stairs. The two onryō engage in a brutal and supernatural confrontation. Sadako overpowers Kayako, gouging out one of her eyes and exploding her head, but Kayako's rage is so strong she does not disappear. Realizing his plan has failed, Keizo orders the girls to flee.

Keizo then enacts a last resort: one of the girls must lure both ghosts into an old well on the property so they can be sealed inside. Yuri chooses to sacrifice herself and jumps into the well. As Sadako and Kayako rush toward her, they collide in a massive burst of energy that bisects Keizo and kills him. Suzuka seals the well, seemingly trapping the spirits. The desperate plan backfires catastrophically. Instead of destroying each other, the two curses merge into a single, horrific entity: Sadakaya. This new creature possesses Yuri's body, has the appearance of Sadako, moves using a combination of both ghosts' methods, and emits Kayako's signature death rattle. Suzuka and Tamao are left helpless as Sadakaya rises and Toshio appears behind them, leaving their fates unknown. In a post-credits scene, an updated version of the cursed videotape shows Sadakaya contorting her body on the screen, signaling that the combined curse has been spread to countless viewers worldwide.