Two years after the horrific events involving the murderous Good Guy doll possessed by the soul of serial killer Charles Lee Ray, toy manufacturer Play Pals decides to salvage its reputation. Despite the bad publicity and the tragic death of former corporate executive Mr. Sullivan, the company reassembles the melted remains of the infamous Chucky doll to prove the initial reports were nothing more than an elaborate hoax engineered by young Andy Barclay.Unfortunately, during the manufacturing process, a technician is electrocuted when residual supernatural energy overloads the
assembly line machinery. The revived Chucky wastes no time; driven by his insatiable need to escape the plastic body and inhabit a human form, he murders the company's chief executive, Mr. Mattson, and sets out to find Andy. Meanwhile, Andy has been placed in the foster care system because his mother was institutionalized due to her unbelievable claims. He is adopted by the kind-hearted Phil and Joanne Simpson, who also foster a cynical older teenager named Kyle.Chucky tracks Andy to his new suburban home. Motivated by a voodoo ritual rule stating he must possess the first person who learned his secret, Chucky terrorizes Andy, determined to make the boy his permanent host. Despite Andy's frantic warnings, Phil and Joanne refuse to believe the doll is alive, mistakenly thinking Andy is acting out due to
psychological trauma. Phil goes down to the basement to investigate strange noises, where Chucky brutally attacks him, causing his fatal fall down the stairs. Convinced that Andy is a violent and dangerous influence, a grief-stricken Joanne has him sent back to the chaotic youth facility.Determined to finish what he started, Chucky stows away in the car and corners Andy at the facility, tying him up and initiating the voodoo chant. Kyle, who has grown fond of Andy and returned to check on him, discovers the horrifying truth when she witnesses the living doll in action. Chucky overpowers Kyle, holding her at knifepoint, and forces her to drive them back to the Play Pals factory.Inside the sprawling, automated toy factory, a terrifying game of cat-and-mouse ensues. Chucky’s plastic body begins to melt and degrade from previous injuries, fueling his blind, psychopathic rage. Andy and Kyle use their wits to evade the killer doll, dodging heavy machinery and streams of molten plastic. Ultimately, Kyle manages to trick Chucky, violently impaling him on a pneumatic hose that pumps him full of compressed air until his head explodes. Exhausted and traumatized, Andy and Kyle walk out of the factory into the dawn, their future uncertain.