Since the previous film's events, Calvin Palmer, Jr. (Ice Cube) has confidently embraced his position as the owner of his grandfather's and father's barbershop in the inner city. However, a new challenge arises when Quentin Leroux (Harry Lennix), an aggressive developer, launches a competing barbershop chain called Nappy Cutz across the street. This flashy establishment boasts extravagant features like complimentary wine upon entry, an aquarium floor teeming with live fish, and staff dressed in bikinis, positioning itself as a serious threat to Calvin's business and claiming that Calvin's barbershop will fail within seven months due to their superior service.
Calvin’s wife offers him wise counsel, urging him not to panic over the rumors surrounding Nappy Cutz's amenities. Meanwhile, Calvin grapples with internal issues at his barbershop. Isaac (Troy Garity), the only white barber, has found newfound fame but feels underappreciated, asserting his star status by branding his customers with a signature "I". On the other hand, Terri (Eve) is progressing in managing her temper but struggles with her growing feelings for Ricky (Michael Ealy). Concurrently, Jimmy (Sean Patrick Thomas) has left the shop to work for local alderman Lalowe Brown (Robert Wisdom), while Calvin's cousin Kenard (Kenan Thompson), fresh out of barber school, proves unable to meet customer expectations.
Calvin is encouraged to sell his barbershop to a Cineplex developer; however, he stands firm against these overtures. To enhance his shop’s appeal, he organizes a barbecue for patrons and establishes new customer interaction rules. This adjustment reveals that Eddie, another barber, has been exempt from paying booth rent, further complicating dynamics at the shop.
Curiosity drives the crew to sneak into Nappy Cutz, where they discover the upscale furnishings and facilities, including a basketball court. As the rivalry escalates, Calvin opts to remodel his shop with modern decor and improved amenities. Despite setbacks, such as Kenard's mishap during a televised haircut for Alderman Brown, Calvin stays resolute against selling.
The looming threat of gentrification becomes clear when Calvin receives a lucrative offer in exchange for supporting the city's pro-gentrification legislation, which would significantly impact the livelihood of the entire community. As tensions rise, Eddie reflects on his past, recalling the chaos following Martin Luther King Jr.'s assassination and his personal journey, which draws him closer to Calvin.
In a twist of fate, Calvin’s ex-girlfriend Gina (Queen Latifah), who manages the beauty shop next door, adds another layer of complexity with her ongoing conflict with Eddie. However, in a moment of clarity, Calvin chooses not to accept the bribe and fervently advocates against the detrimental plans for his neighborhood at a city council meeting. Despite his impassioned plea about the potential damage to the community, the council still approves the legislation.
Throughout this tumultuous journey, Terri and Ricky embrace their feelings for each other, while Isaac makes his way back to Calvin’s shop after leaving Nappy Cutz. Although the community faces the consequences of gentrification, their loyalty towards Calvin's barbershop remains steadfast, highlighting the strong bonds that hold the neighborhood together.
