Phoonk ended with Madhu (Ashwini Kalsekar) who practices black magic on Rajiv’s (Sudeep) family getting killed by tantrik Manja (Zakir Hussain). Phoonk 2 begins with some time having passed by since then. The old granny has gone off to a tirth yaatra and Rajiv takes his family to a vacation at his newly purchased beach house in Alibaug. But little does he know that his troubles have not really ended but multiplied in fact. Dead Madhu’s ghost comes to haunt his family. Her spirit enters Rajiv’s wife Aarti’s (Amruta Khanwilkar) body. It aims to kill all those people who are dear to Rajiv including his daughter Raksha (Ahsaas Channa) and sister Arushi (Neeru) who has come down from the US with her hubby Ronnie (Amit Sadh). How Rajiv fights back Madhu and the life threat on his near and dear ones forms the rest of the film.