Some time after the events of the first film, Buster Moon is thriving with his new theater. However, he fails to impress talent scout Suki, who tells him he would not make it in Redshore City. Buster, encouraged by Nana Noodleman, reunites the singers who competed in the first film and takes them to the city.They sneak in for an audition with entertainment mogul Jimmy Crystal. Crystal is uninterested in Buster's original show pitch, therefore, Gunter pitches a space-themed show which would feature Clay Calloway, a rock star who has not been seen in 15 years. Intrigued, Crystal green lights it, telling them to have the show up and running within three weeks.During production on the show, Rosita develops a fear of heights during rehearsal and is unable to keep on her role, which is given to Crystal's daughter Porsha while Rosita is delegated to a minor role. Meanwhile, Johnny has been assigned to work with top choreographer Klaus Kickenklober for his part in the show but senses that Klaus dislikes him due to his inability to dance. Johnny comes across a street dancer named Nooshy, who agrees to help him out. Meena has been cast in a romantic scene with Darius, a self-absorbed actor with whom Meena has no chemistry with. She later meets and falls in love with an ice cream vendor named Alfonso.Ash and Buster visit Clay Calloway to convince him to be in the show. He refuses at first, but Ash changes his mind. Back at the theater, Buster asks Porsha if she would like to switch roles with Rosita as she cannot act. Porsha interprets this as Buster firing her. Upon learning this, Crystal blames Porsha for embarrassing him and nearly throws Buster off his building before locking him in a closet. Suki frees Buster and warns him to get out of Redshore City, before Crystal can kill him. Ash arrives with the crew and Calloway, who advises Buster not to run and hide like he did after he lost his wife. Buster then decides to have the cast and crew put on the show one night behind Crystal's back and has Miss Crawly get Porsha to rejoin them in the show.During the show, a jealous Klaus takes the place of Johnny's performance partner to try to undermine his number, but Johnny defeats Klaus with encouragement from Nooshy and finally earns Klaus' respect. Meena visualizes Darius as Alfonso and performs a romantic duet with him. Having found out about the show and angered when Porsha stands up to him during her part, Crystal tries to stop it by dropping Buster off the top of the stage which causes Rosita to overcome her fear of heights to save the latter. When the time comes for Calloway to take the stage, he claims that he is not ready. Ash leads the crowd in a rendition of one of Calloway's songs, giving him the courage to perform.After the show, Suki has Crystal arrested by the police for endangering Buster and his friends. While Buster and his friends prepare to leave, Suki stops them and tells them that a major theater wants to put on their show. As the cast puts on their first performance, Buster watches from the VIP section, proud to have succeeded in Redshore City.