The movie starts out with a teenage girl Emily, (Emily Van Camp) and her friend Jake (Ryan Merriman) in his house in the middle of the night. He’s telling her that he has the scariest thing she could ever watch. She doesn’t want to watch it, she just wants to hang out, but he keeps insisting she watch it, to the point where he’s getting irate and aggressive, telling her that she HAS to watch it and that he made a copy just for her. She finally agrees and he leaves the videotape and goes into the kitchen. We see her put the video into the VCR, then we see the familiar images from the first movie. Meanwhile he’s in the kitchen, waiting nervously, staring at the clock on the microwave. He pulls up his sleeve and we see that hand bruise that Rachel had in the first movie. The phone starts ringing, scaring him, but he answers it anyway. It’s his friend asking whether or not the girl has watched the tape and whether or not the guy is going to tell her about the curse or just leave her on her own. He tells his friend that she’s watching it now and that she’s just some girl from school, not anyone special.
He’s walking up to the door to see if the girl is done watching the video. Right when he starts to push it open, he sees water starting to pour out from the living room. He starts panicking and yelling for the girl. He gets into the living room and she’s there with her hands over her eyes. We see the same thing from the last movie where the well is on the TV and Samara starts crawling out of it towards the TV screen. He yells at the girl saying didn’t you watch it? She admits putting the tape in the VCR but she was so freaked out by him telling her it was scary that she didn’t watch it, but instead had her hands over her eyes the entire time.Of course Samara is now REAL close to the TV and there’s just a lot of screaming from both the girl and the boy as the audience assumes that what happened is what happened in the last movie.
Now we get to Rachel and Aidan (Naomi Watts and David Dorfman). They’ve left Seattle and moved to the coastal town of Astoria, Oregon. Rachel is working for the town's small newspaper which she says allows her to spend more time with Aidan. Aidan is now very into taking pictures with a digital camera (Important), and Rachel encourages him by telling him that his father would have been proud. She and Aidan have this discussion where she asks why he doesn’t call her mom, or mommy or moms. He says that Rachel is more suited to her personality, and that he would rather call her that.
We meet Max (Simon Baker), her co-worker at the paper who just seems to be a nice guy. While working on a story she hears a police scanner outside that everyone in the office is listening to. She of course realizes that the situation (possible homicide, the unseemly look on the dead party’s face and a girl who is either a suspect or a witness) is very familiar to her and she freaks out and takes off to the scene of the crime .
She tries talking to the police on the scene but they tell her nothing. She sees the girl who was in the living room getting escorted by the police into a squad car. Somehow Rachel manages to sneak into the ambulance that the dead boy’s body is being stored in. She wants to check whether or not his face is contorted the way the victims were in the first movie. She opens up the bag and sure enough, there his face is, all in fear. She closes the bag but as she’s closing it a hand pops out and grabs her, not the boy’s hand, but Samara’s. She says she has found Rachel and that she will never leave.
Freaking out, Rachel leaves and ends up going to the police precinct so that she can talk to the scared girl. She gets there and they once again won’t tell her anything. She sneaks in to talk to the girl and convinces the girl to tell her where the videotape is. She goes back to the house, ejects the tape and goes to the woods where she lights it on fire.
Meanwhile back at the house Aidan is sleeping. He has a nightmare about Samara grabbing him and pulling him into the TV. He wakes up screaming and Rachel runs in the room. She tries to ask him about the nightmare (knowing something might be up since she burned the tape) but he won’t tell her anything. He just says he’s cold.
The next day, he and Rachel go off to an antiques swap meet so that he can take pictures while she sort of just roams around. He’s taking pictures of various things when he notices deer in the distance, that seem to be staring at him. He goes to the bathroom, tries to turn on the faucets but no water comes from them. He looks in the mirrors and just starts taking pictures of himself over and over again. While he’s doing this Rachel is freaking out that she’s lost her son. She finds him in the bathroom, and asks if he’s okay, and once again all she gets from him is I’m just cold.
They’re in Rachel’s car driving home and she’s asking him to tell her if something’s wrong. They almost get into a car accident when a deer just decides to stand in the middle of the road. Aidan is freaking out saying that Rachel should just keep driving, but Rachel is just confused as to what’s going on. Then a deer from the side comes and rams their car. Then more deer from all directions keep slamming into her car, she starts driving and ends up getting hit by more deer. She stops the car and they realize there’s got to be at least 20 of them all surrounding the car. She finally listens to Aidan and starts driving and the deer just stare at them as they drive off.
She tucks Aidan into bed and goes off into the living room. She’s doing something when the lights go out in her house. She goes upstairs to check on Aidan and finds Samara scratching the walls of the house. All of a sudden Samara changes into Aidan and Rachel freaks out. She leaves the house with Aidan in tow and they go to her office. Max is there and wants to know what happened to her car (which is totaled) and what happened to Aidan because at this point he’s blue and shivering. He offers to let them stay at his house and she accepts. They go to his house and she runs the bath with warm water because they realize that Aidan is now hypothermic and they need to get his body temperature up. Aidan doesn’t want to but Rachel reassures him and gets him to go in.
Rachel leaves Max’s house to pick up some things for Aidan from their house. While she’s gone, Max is waiting for Aidan to get warmer when he gets a phone call. As he’s talking on the phone we see the door to the bathroom shut. He gets off the phone and tries to check on Aidan, asking him to open the door. Rachel gets back and they try to hit the door open. He goes downstairs to get something to break the door down with and Rachel manages to get into the room, which is now flooding. When she opens the door Aidan is in the bathtub and all the water is flying into the air not touching him. She gets to him and all the water falls to the ground and back into the tub. Aidan falls back into the tub and Rachel tries to grab him and ends up grabbing long slimy hair (Samara’s). She tries to drown Samara, but then she turns into Aidan and Rachel realizes she’s drowning her son. Max gets there just in time to see her pulling Aidan out after almost drowning him and he forces her to take Aidan to a hospital.
At the hospital Aidan is asleep and Rachel is waiting. Max talks to her and she shows him the pictures of Aidan that he took at the swap meet. She asks him what he sees. He says he sees Aidan and what appears to be a little girl with her hands on Aidan’s face. Rachel explains who the girl is and that she thought that Samara wanted to kill her and Aidan but now realizes that Samara wants to BE Aidan. When Rachel goes back to check on her son the hospital psychiatrist and staff ask her to leave because they think that she’s abusing her son.
She leaves and goes to the adoption agency where Samara was adopted. The lady there tells her that she can’t tell Rachel who Samara’s real mother is, even though Samara’s dead. She says that the only people she can talk to would be the Morgans. Rachel explains that both of Samara’s foster parents are dead as well, but the lady still won’t help her. Rachel leaves and drives to the Morgan farm from the first movie. She gets there and meets a man who turns out to be a real estate agent. He’s having an open house and is trying to get it sold. When she asks him what happened to the people who lived here before he lies and says that he thinks they bought a condo in Bermuda. She asks if they left anything and he says it’s all in the basement. Rachel goes down there and finds a suitcase that belonged to Samara’s real mother. She finds out that Samara’s mother showed up at a convent 8 months pregnant and that after she had the baby, she tried to drown it in a pond outside. She also finds out that Samara’s birth mother (Evelyn) is still alive.
She heads to the psychiatric institution where Evelyn is and gets to visit her. Evelyn says that Rachel let the dead out and that the only way to fix it is to kill Aidan. She tried to kill Samara because she knew she was evil. Rachel realizes what she has to do and heads back home. Meanwhile, Aidan is awake at the hospital and the psychiatrist is asking him questions about whether or not Rachel hurt him. He says that he wants to go home and be with his mommy. The psychiatrist tells him he can’t and he/Samara gets her to kill herself with a syringe. He gets dressed and leaves the hospital.
Max goes to Rachel’s house and finds Aidan already there waiting for his mommy. He tries to take Aidan’s picture to see if the girl is there but Aidan says no. Max asks why not and Aidan tells him that if he promises not to take a picture then he will tell him why. Max sets the camera down on the table, but with the auto shutter on to take a picture.
Rachel gets home and finds Aidan watching TV. She sees Max’s jacket and asks if he’s there. Aidan says no, he was there but he’s gone now. She goes outside and sees Max’s truck. She opens the door and Max is dead, his face contorted. She realizes that Samara has possessed her son. She goes back into the house and talks to Aidan/Samara. She says she’s going to make some food and goes into the kitchen. Rachel makes peanut butter and jelly sandwiches and then laces Aidan’s with what I assumed was a tranquilizer. She takes the sandwiches out and Aidan eats them.
When she realizes Aidan is out cold, she takes him into the bathtub and proceeds to drown him. He asks her what she’s doing and struggles, but she holds him down and drowns him. Samara leaves the body and Rachel tries to revive Aidan. Aidan finally wakes up and they go into the living room. The TV suddenly goes on and Aidan says that she’s coming for him again. Rachel says no and tells Samara to take her instead. She says that she knows Samara just wants a mommy so she‘ll go and be her mommy. Samara pulls her into the TV and Rachel is suddenly dropped into the well that Samara was thrown into.
She looks up and realizes that the reason Samara can come out is because the big heavy lid is always partially open. Rachel starts climbing out of the well by grabbing the rocks. She gets about halfway up when Samara emerges from the bottom of the well and starts climbing after her in this messed up fast slow crab-walk thing. Rachel gets almost to the top and Samara grabs her leg, she kicks Samara off and manages to get out of the well. Rachel starts closing the lid and Samara screams ‘MOMMY! to which Rachel replies, I’m not your fucking mommy, and closes the lid, trapping Samara.She realizes that she’s still in the video and starts looking for a way out. She hears Aidan calling her name and starts heading toward it. She ends up on that cliff from the video where Samara’s foster mother jumped off. Aidan is still calling her so she leaps off the cliff and ends up back in her living room where she and her son are reunited.