Eight years after the events of the original film, Miami detectives Marcus Barnett and Mike Lowrey find themselves deep into an investigation involving a surge of highly potent ecstasy flooding their city. Their surveillance of boats arriving from Cuba unexpectedly leads them to a secret Ku Klux Klan meeting taking place in a swamp, where a drug drop is also about to unfold. However, the raid on these Klan members ends in catastrophe. Malfunctioning radios delay backup support, resulting in a chaotic shootout that sees Mike accidentally shooting Marcus in the buttocks. Unfortunately, the Klan members turn out to be merely small-time buyers, not the actual distributors of the drugs. This blunder leaves Marcus questioning whether he still wants to partner with Mike while Mike worries that Marcus might discover his romantic feelings for Marcus' sister, Syd.
What they don't realize is that Syd is actually an undercover DEA agent involved in tracking money laundering for Russian gangsters; these gangsters are, in fact, working as the distributors for the ecstasy on behalf of the neurotic Cuban drug lord, Johnny Tapia (played by Jordi Mollà). In the midst of her first assignment in Miami, a violent Haitian gang tries to hijack a money transport between the Russians and Tapia, which places Syd in a precarious situation. As luck would have it, Mike and Marcus unwittingly walk into the escalating chaos, triggering a spectacular firefight and a high-octane car chase that wreaks havoc across the area and provokes the ire of Police Captain Conrad Howard (Joe Pantoliano). The duo soon discovers Syd’s true allegiance, which adds further strain to their partnership, and Captain Howard pressures them to pinpoint the supplier of the ecstasy.
The detectives confront the Haitian gang leader, leading to another fiery skirmish. In a twist of fate, the leader reveals that his information stemmed from footage on his friend’s camcorder. Eager to investigate further, Marcus and Mike discover that the Spanish Palms Mortuary may be a front for Tapia's operations. Disguising themselves as pest controllers, they manage to infiltrate Tapia's lavish mansion, where they find out that he has disposed of his Russian associates and is now attempting to ensnare Syd, who remains undercover and has redirected her focus towards Tapia’s activities. They also uncover evidence linking Tapia to the tumultuous Klan raid.
After compelling one of the captured Klan members to identify Tapia's boat, the detectives find themselves in yet another shootout while chasing a morgue van laden with empty cadavers. They make a shocking discovery—it becomes evident that the drug lord is using dead bodies to smuggle drugs and cash. Their operation is on the verge of being compromised when Marcus accidentally consumes some of the ecstasy, prompting Mike to instruct the undercover officers to crash an ambulance into the building for distraction during their escape. After unorthodoxly securing a search warrant from Captain Howard, they undertake a raid on both the mortuary and Tapia's mansion, leading to the Coast Guard intercepting the drugs and money. However, the mansion operation takes a turn for the worse when a furious Russian gangster named Alexei (Peter Stormare) attacks, resulting in his death at the hands of the police while Syd is captured by Tapia and whisked away to Cuba.
Held captive and threatened by Tapia, who demands his money back in exchange for Syd’s freedom, Mike and Marcus, alongside a volunteer SWAT team and Syd’s DEA colleagues, gear up for a daring military assault to rescue her from Tapia's heavily fortified stronghold. During the heart-stopping rescue operation, Mike and Marcus successfully extract Syd but are relentlessly pursued by an enraged Tapia. The chase leads them into a perilous minefield near the U.S. Naval Base at Guantanamo Bay, where Tapia gains the upper hand with Mike held at gunpoint. In a thrilling moment filled with tension, Marcus saves Mike with a precise shot to Tapia's skull.
In a humorous homage to their previous adventure, Mike shouts, >“That's how you shoot!” After all the chaos, we find ourselves at the Burnett residence, where Mike presents Marcus with a new pool, an amusing nod to an earlier disaster. Eventually, Marcus reconciles with Mike dating Syd, putting to rest his doubts about their partnership. Yet, fate has a sense of humor, as Mike's new pool hilariously breaks, sending them both tumbling into a river as they joyfully sing the iconic "Bad Boys" theme song.
