The film opens with the same scene from the first film, of Bill (David Carradine) shooting the Bride (Uma Thurman). The Bride herself then appears behind the wheel of a car, briefly recounting the events of the previous film and stating she is currently on her way to kill Bill.
In a flashback, the Bride — visibly pregnant — and her groom, Tommy Plympton, (Chris Nelson) rehearse their wedding. Bill, her former lover and leader of the Deadly Viper Assassination Squad, arrives unexpectedly and wishes her well. It is revealed that the Bride had retired from assassination and left Bill in order to give a better life to her unborn daughter. Moments later, the other assassination squad members arrive and attack the wedding rehearsal on Bill's orders.
In the present, Bill warns his brother Budd (Michael Madsen), a former Deadly Viper and now a bouncer, that he will be targeted next. The Bride arrives at his trailer and bursts through the door, expecting to ambush him, but Budd is expecting her, shooting her in the chest with a double-barreled shotgun blast of rock salt, then sedating her. Budd calls Elle Driver (Daryl Hannah), another former Deadly Viper, offering to sell her the Bride's Hanzō sword for a million dollars cash. He then seals the Bride inside a coffin and buries her alive.
A flashback shows Bill and the Bride camping one night, when Bill tells her a story of legendary martial arts master Pai Mei (Gordon Liu) and his Five Point Palm Exploding Heart Technique, a death blow Pai Mei has so far refused to teach any of his students. Bill then takes the Bride to Pai Mei's temple to be trained by him. Though Pai Mei initially ridicules her for being a Caucasian American woman (three things that, according to Bill, Pai Mei utterly despises), she eventually gains his respect and learns a number of techniques, including the art of punching through thick planks of wood from inches away. She uses this skill to break out of the coffin and claws her way to the surface.
Elle arrives at Budd's trailer for their transaction but has hidden a lethal black mamba with her money, out of envy that Budd earned the credit for killing the Bride. After the black mamba kills Budd, she then calls Bill and tells him that the Bride has killed Budd by putting the black mamba in his trailer, and that Elle has killed the Bride; it is at this point that the Bride's name, Beatrix Kiddo, is finally revealed. As she exits the trailer, she is ambushed by Beatrix, who had arrived there soon after Elle. In the middle of an all-out battle in the trailer, Elle taunts Beatrix with the news that Elle, who also trained with Pai Mei, had poisoned him in revenge for his snatching out her eye when she called him a "miserable old fool." Beatrix then plucks out Elle's remaining eye and leaves her screaming and thrashing about in the trailer with the black mamba.
Beatrix subsequently travels to Mexico to interrogate an elderly gentleman, Esteban Vihaio, about Bill's whereabouts. Esteban, who is the proprietor of a brothel, was purportedly a father figure to a younger Bill. Regardless, Esteban willingly divulges Bill's location, stating that Bill "would want [him] to."
After finding Bill deep in the Mexican countryside, Beatrix is shocked to find her now-four-year-old daughter B.B. (Perla Haney-Jardine) alive and well. She spends the evening with Bill and B.B. After B.B. has gone to bed, Bill shoots Beatrix with a dart containing a truth serum and interrogates her. A flashback recalls Beatrix's discovery of her pregnancy while on an assassination mission, and her resulting decision to call off her assignment and leave the Deadly Vipers. While on an assassination assignment to kill Lisa Wong, Kiddo discovers she is pregnant with Bill's baby. Immediately after, she is confronted by Karen Kim, an assassin sent by Lisa Wong to kill her. However, Karen narrowly misses her shot. During the resulting stand-off, Kiddo convinces Karen to pick up the positive pregnancy strip from the floor. The two mutually agree to abort their missions and go home. Beatrix explains in the present that she ran away without telling Bill in order to protect their unborn daughter from him and his life. Though Bill understands, he remains unapologetic for what he did, explaining that he's "a murdering bastard," and that "there are consequences for breaking the heart of a murdering bastard." They fight, but although Beatrix loses her weapon, she disables Bill with Pai Mei's Five Point Palm Exploding Heart Technique, which he had secretly taught her. Bill makes his peace with her and dies. Beatrix departs with B.B.; later they are seen watching cartoons in a hotel together after Beatrix gives thanks.
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