Sometime after the events of the previous installment, Omni Consumer Products (OCP) concocts a plan to have Detroit default on its debts. This move would enable OCP to foreclose on the entire city, seize control of its government, and implement the long-planned development known as Delta City, a new community initiative. With the success of the RoboCop program, OCP accelerates its agenda. To facilitate this scheme, they incite a police strike by terminating pension plans and slashing salaries. However, RoboCop (played by Peter Weller), bound by his status as OCP’s property due to a secret fourth directive, remains on duty alongside his partner, Anne Lewis (Nancy Allen).
Simultaneously, OCP's Security Concepts division is pouring millions into creating a more sophisticated RoboCop 2. Yet, turmoil ensues as each attempt ends in disaster, with all selected officers committing suicide. In this chaos, Dr. Juliette Faxx (Belinda Bauer), a morally questionable company psychologist, deduces that RoboCop’s profound sense of duty and aversion to suicide allowed him to adapt successfully. She persuades the Old Man (Dan O'Herlihy) to approve her leadership on the project, this time opting to use a criminal driven by a craving for power and a fear of death, much to the displeasure of her colleagues.
Meanwhile, a menacing new drug called Nuke is wreaking havoc on the streets of Detroit. Its dealer, Cain, believes it holds the key to paradise, driven by an insatiable thirst for power. Supported by his girlfriend, Angie, his young accomplice Hob, and the corrupt officer Duffy, who struggles with his own Nuke addiction, he leads a destructive enterprise. RoboCop, having extracted information from Duffy, confronts Cain and his crew at an abandoned construction site. Unfortunately, they overpower RoboCop, disassembling him and leaving his parts outside his precinct. Duffy faces a grim fate afterward due to vivisection.
In the wake of this turmoil, Dr. Faxx and her team patch up RoboCop, but not without drawbacks; they program him with over 300 PR-oriented directives that muddle his mind, hampering his ability to act decisively. Realizing he needs a substantial electrical charge to reboot himself, RoboCop makes the dangerous choice to latch onto a high-voltage transformer, which helps him clear all directives—both old and new. With renewed determination, Murphy rallies his fellow officers, inspiring them to help him storm Cain's hideout. During a chaotic escape, Cain sustains severe injuries when his vehicle flips.
With Cain incapacitated, Hob takes charge. Dr. Faxx, seizing an opportunity, selects Cain for the RoboCop 2 project, ending his life support to transplant his brain into a new machine. Hob then approaches Detroit's mayor, offering assistance to alleviate the city’s debt to OCP, with the caveat of allowing Nuke's legal distribution. This proposition greatly threatens OCP’s plans for Delta City, leading them to send Cain to eliminate everyone in the negotiation meeting, although the mayor manages to escape. RoboCop arrives too late but discovers a dying Hob, who identifies Cain as the assailant.
During a press conference announcing Delta City's launch, the OCP President inadvertently reveals a canister filled with Nuke. Under its influence, Cain succumbs to chaos, violating every command placed upon him, and opens fire on the unsuspecting crowd. In a climactic showdown, RoboCop engages in battle with Cain, with both cyborgs plunging into an underground facility amidst the frenzy. With the police force arriving to confront Cain, RoboCop returns to the OCP building to reclaim the Nuke canister. As Cain becomes distracted by the drug, RoboCop seizes the moment to leap onto his back, tearing out Cain's brain and destroying it, ensuring Cain's final demise.
Following the massacre, the Old Man, Johnson, and OCP's legal counsel, Holzgang, deliberate on the company's liability while planning to scapegoat Dr. Faxx, the mastermind behind the RoboCain experiment. Lewis expresses frustration over OCP's evasion of accountability, while RoboCop maintains that they must exercise patience, stating, > "We're only human."
