The film opens spoofing the opening to Look Who's Talking where Chucky's sperm reaches Tiffany's egg and a baby is conceived and grown over time. At the end of the scene, the baby passes through the birth canal as seen in the last moment in the final film.
Six years later, Glen (Billy Boyd), the gentle, benevolent son of Chucky and Tiffany, has a nightmare in which he slaughters a little girl's parents and living a life of embarrassment as a ventriloquist's dummy from his own point of view. Desperate to know his parents, Glen tracks them down to Hollywood. Chucky and Tiffany are first shown killing a man dressed as Santa Claus for a movie. Upon tracking down his parents, who are now dummies in one of Jennifer Tilly's films, Glen uses a voodoo amulet to bring them back to life. Shortly afterward, when Chucky (voice of Brad Dourif) finds out that Glen is his child, he faints. But as for Tiffany, she was very happy and hugs her child. Tiffany and Chucky have a dispute over whether Glen is male or female, due to his lack of genitals (though he is evidently a male). Chucky decides to continue labeling him as a boy, whereas Tiffany labels him as a girl, calling him "Glenda".
When a puppeteer, Tony Gardner, begins taking Tiffany apart, she and Chucky cut his head off with a piano wire. Jennifer Tilly sees the beheaded body and calls the police. Glen is horrified by this, and later asks them why they murder others, as he feels that violence is bad. Tiffany and Chucky then make an agreement to quit killing, although Chucky only pretends to agree.
Jennifer tries to get a role as the Virgin Mary in Redman's directorial debut, but after Redman says that Jennifer isn't right for the part, she invites him over to her house. Chucky and Tiffany make plans to transfer their souls into Redman and Jennifer. Jennifer and Redman start to make out, only for Tiffany to knock them out. While they are unconscious, Tiffany inseminates Jennifer with Chucky's semen. Chucky leaves and takes Glen with him. After driving Britney Spears' car off the road, killing her, they proceed to go to a photographer's darkroom. The photographer, Pete Peters (John Waters), had taken pictures of Tilly kissing Redman, and of Chucky masturbating. Glen tries to warn Peters that Chucky will kill him, only for Peters to bump into a shelf, causing a jar of acid to fall and accidentally kill him. Chucky, overjoyed, believes Glen did this on purpose and takes a picture to celebrate, much to Glen's and Tiffany's dismay.
Jennifer awakens the next morning, realizes that she is pregnant and claims it is Redman's, though he states that this is impossible. In anger, Tiffany rips his intestines out. The next day, Jennifer is horrified to find herself with a fully pregnant belly. The voodoo magic that fuels the killer dolls has also accelerated the pregnancy. Jennifer is captured by Chucky and her chauffeur, Stan, serving as Chucky's replacement body due to Redman's death is also captured. Jennifer's assistant, Joan (Hannah Spearritt), tries to help her, but is brutally killed. Chucky later reveals that he killed three people and hid them in a closet like Tiffany did to Redman trying to stop "Tiffany" from "crying" when he believed that she was crying for killing Joan. However, it turns that it was Glenda, Glen's twin sister (it was revealed, at that time, that Glen and Glenda share Glen's body, thus having two souls in the body), did this. Unlike Glen, she is just like her father, a psychopath wannabe. Tiffany finds out about this and smacks Glenda to break Glen out of this.
Jennifer gives birth to twins, a boy and a girl, and it is then that Chucky has an epiphany. After several years of being an infamous killer doll, Chucky finally accepts his circumstances. Disturbed, Tiffany rejects Chucky and resolves to take Glen with her. An enraged Chucky throws a knife at Jennifer, but Stan jumps in front and is stabbed in the chest, he tells Tilly that he loves her before he dies. Before Glen can decide which baby to possess, the police arrive, forcing the dolls to flee. Jennifer is rushed to the hospital by the cops, but claims she wants to see her babies. Tiffany drugs Jennifer and begins to possess her, but Chucky breaks in and kills Tiffany with an axe. Before Tiffany dies, she tells Glen to not make the same mistakes she and her husband have made. Glen, shocked that his mother was killed by his father, snaps and fights Chucky. Jennifer then throws an axe to Glen. When Glen picks up the axe, he impales Chucky in the chest. At that time, Chucky thought he was fighting against Glenda, but Glen reveals that it was he, himself, doing this, as he dismembers him. Glen then asks Chucky if he is proud of him and Chucky congratulates Glen before being decapitated and killed by his son. Realizing what he has done, Glen suffers an emotional breakdown, in which Jennifer comes to comfort Glen.
Five years later, at Glen and Glenda's birthday party, a nanny quits her job because Jennifer's daughter, Glenda, stares at her with hatred and scares her. Jennifer lets her quit, only to kill her when she turns away, and Jennifer's eyes switch to Tiffany's, revealing that Tiffany was successful in possessing Jennifer's body. (In the extended version, she hides the nanny's body and then tells her daughter, Glenda to keep this a secret, which she agrees.) Glen has taken the body of the son, and receives a strange, unnamed present. When Glen opens the present, he sees that it's Chucky's right arm. Frightened, he wets his pants and turns around. Chucky's arm then grabs him, and he begins screaming as Chucky's evil laugh is heard.
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