After the decline in Atlantean culture following the sinking, Kida (Kidagakash), now Queen, and married to Milo Thatch, now a king, was using the heart of Atlantis to restore her city's former glory. Though the evil Rourke is gone, more dangers would be under way, during the upcoming missions. Milo's comrades and Mr. Whitmore arrived in Atlantis; while their arrival was unexpected the Atlanteans welcomed their old friends. Unfortunately, they had come to inform them of mysterious forces causing trouble on the surface. At first they presumed it to be an ancient Atlantean defense mechanism gone rogue (like the Leviathan from the previous film, although it remained loyal). When they arrived at Norway, their cargo ship gets heavily damaged by the creature, though the group managed to escape in their Sub Pods. After reaching the surface and coming across a cliffside village covered in fog, they are greeted by the town's magistrate, Edgar Vulgud, who tells them that their damaged ship will be repaired at Trondheim and that a driver will take the group there first thing next morning, allowing them to stay the night in the local inn. After meeting the innkeeper, Inger Allyson, she tells them a bit about the day Vulgud made a "deal with the devil", where he asked for immortality, but forgot to ask for eternal youth. She then tells the group to stay clear of Vulgud and to leave while they still can. Later that night, Milo and the group try to follow Vulgud, only to get lost in the fog. When Milo spots what he thinks is the village lights, they end up going over a cliff, though the group was able to gling on to parts of the cliff except Audrey, who gets stuck further down in the cliff. When Milo climbs down to Audrey, he reaches out for her hand. When Audrey realizes they’re not close enough, she decides to jump up to Milo (against his warnings). She manages to catch Milo's hand, but her hand slips out of her glove and she falls, only to be saved by Mole. The next day, Vulgud appears in front of Inger in the inn, telling her to gather the group's possessions and destroy them. Milo and the group appear behind Vulgud, much to his surprise. After he leaves, Milo asks Inger for more details about Vulgud’s deal. She explains that years ago, the fish left the nearby seas and that her village was on the brink of death. Vulgud later struck a deal with a creature called the Krakken. After that, people weren’t allowed to leave their homes, their spirits were lost and the village was covered in fog. Later that day, the group decide to investigate the shores for a secret entrance, which Mole later discovers. After entering the cave, they see Vulgud with the Krakken, leading to the group assuming that Vulgud is the master, commanding the Krakken to destroy cargo ships containing supplies to give to the village. After seeing Audrey walk towards the monster in a hypnotised state, they stop Vulgud, only to notice the Krakken didn't stop. After saving Audrey, the group return to their sub pods to fight the monster underwater in its lair. During the battle, the group realizes that the Krakken was the real master after Vinnie gets possessed, though Mole was able to knock him out of it with a wrench. After a few failed attempts, they blow up the Krakken, causing Vulgud to disintegrate and the spirit of the village to be restored and the fog to disappear. Milo said it's up to people like Inger to raise their little ones in peace. (A deleted scene shows that Inger's child had Krakken tentacles, implying it's not over.)
All the while, Kida was learning about the outside world and is adapting well. However, she still felt guilty, as there could still be other Atlantean war machines in the world causing problems, like the Leviathan. Their next mystery was in the Southwest, involving coyote spirits opposing them. They later found a hidden city in Arizona contains a statue that greatly resembles Atlantean architecture. Unfortunately, a very sly shop owner, Ashtin Carnaby, intended to pillage the place for its valuables, but the spirits then turn him into one of them. Chakashi, a Native-American man, who was a medium between the spirits, trusted them with the knowledge of their sanctuary and informed Kida that she can choose Atlantis' destiny.
The third mystery that needed to be solved was from Whitmore's cabinet. An old competitor Erik Hellstrom stole a possession of his (having lost his mind following the stock market crash ruining his company; Hellstrom thinks he's Odin), an artifact called the Spear of Destiny (aka Odin's spear, Gungnir), presumably an Atlantean artifact of origin. When they tracked him down in the frigid Nordic Mountains, he presumed Milo to be the trickster god, Loki and Kida to be his long lost daughter, Brunnhildë and kidnaps her. His intentions were to end the world in Ragnarok. He created a lava monster (the Fire demon Surtr (or Surtur)) and and ice beast (a Nordic Frost Giant) to destroy the world, but well-placed explosives used by Vinnie distracted the monsters (By causing each beast to believe they were trying to destroy each other). Kida later gets a hold of the spear and uses it to crush the beasts with Hellstrom's castle, Asgard. During these escapades, Kida came into a greater understanding of just how powerful the Atlantean Crystal is, and she must choose between hiding it and sharing it with the rest of mankind.
Having retrieved the spear, Kida realized her father was wrong to hide the Crystal from mankind. She combined the Spear with the Heart Crystal and lifted Atlantis to the surface. Two fishermen were shocked when they suddenly see an entire continent rise before them. In the end, we see Atlantis above the water for the first time in over 9000 years.
As the movie came to an end, Mr. Whitmore narrated that from then on, the world was a better place.
- James Arnold Taylor as Milo Thatch
- Cree Summer as Kida Nedakh
- Corey Burton as Gaetan Molière
- John Mahoney as Preston B. Whitmore
- Phil Morris as Joshua Sweet
- Don Novello as Vincenzo Santorini
- Jacqueline Obradors as Audrey Ramirez
- Florence Stanley as Wilhelmina Packard
- Steve Barr as Jebidiah Allardyce "Cookie" Farnsworth
- Floyd Red Crow Westerman as Chakashi
- Clancy Brown as Edgar Vulgud
- Jean Gilpin as Inger Allyson
- Kai Rune Larson as a Seaman, Gunnar
- Bill Fagerbakke as Sven
- Thomas F. Wilson as Ashtin Carnaby
- William Morgan Sheppard as Erik Hellstrom
- Jeff Bennett as Sam McKeane
- Frank Welker as Obby, Mantell