The story of Kanchana 2 takes place after the events of the first film. Raja (Raghava Lawrence) has married a woman named Bhavani (Radhika) and is living a happy life. However, his life takes a turn when he starts experiencing strange and supernatural occurrences. He soon discovers that his new house is haunted by a bhoot (ghost) named Kanchana, who was a victim of a brutal murder.