Three years after the events of the first Battle Royale, Shuya Nanahara has become the leader of an anti-government rebel group called the Wild Seven, fighting to dismantle the totalitarian regime that once forced him to kill his classmates. In retaliation, the Japanese government launches a new and deadlier program, Battle Royale II. Instead of forcing students to murder each other, a new class of ninth-grade delinquents and social outcasts is kidnapped and ordered to storm the Wild Seven's island fortress, killing Shuya within 72 hours or facing certain death.

The setting shifts from a deserted island to a full-scale war zone, filmed partly on the abandoned Hashima Island, while the government operates from a militarized headquarters. The students are outfitted with explosive collars, this time linked in pairs so that if one dies, their partner is killed remotely as well. Their schoolteacher, the sadistic Riki Takeuchi, oversees the operation, forcing reluctant orphans and children whose families died in Wild Seven bombings to participate.

Among the students are Takuma Aoi, a cynical delinquent, and Shiori Kitano, the estranged daughter of the original program's teacher, whom Shuya killed three years prior. After a bloody beach landing that kills half their number, the surviving students are captured by the Wild Seven, who remove their collars and ask for their help. While most join Shuya's cause, Takuma and Shiori remain distrustful.

On Christmas Day, Shuya broadcasts a message of freedom to the world, prompting the United States to threaten military intervention. The Japanese prime minister orders a full assault on the island with no survivors allowed. As government forces attack, the students and rebels suffer heavy casualties. In a key narrative arc, Riki Takeuchi reveals he himself wears an explosive collar and ultimately sacrifices himself to allow the survivors to escape.

During the final battle, Shiori is mortally wounded. Before dying in Shuya's arms, she forgives him for killing her father, having joined the program to understand the father she never knew. Shuya and Takuma charge into the gunfire as American bombs begin to fall. The program ends with their fates listed as unknown, but three months later, Shuya and Takuma are shown reuniting with Noriko Nakagawa and other survivors in Afghanistan, having regrouped as friends with an uncertain future ahead.