Plot
One year after the brutal murders of her friends, Helen Shivers and Barry Cox, by the vengeful fisherman, Ben Willis, Julie James is attending summer classes in Boston, but suffers from nightmares of the incident. Julie's roommate, Karla Wilson, receives a phone call from a local radio station and wins a vacation for four to the Bahamas. Julie invites her boyfriend, Ray Bronson, who, despite initially declining, decides to go. That evening, Ray and his co-worker, Dave, drive to Boston to surprise Julie, but stop due to a body in the middle of the road. When Ray discovers the body is a mannequin, Ben appears and kills Dave with his hook, then chases Ray in a truck, but Ray escapes and falls down a hill.
The next morning, Julie, Karla, Karla's boyfriend, Tyrell Martin, and their friend, Will Benson, depart for the trip. The group arrives at the hotel in Tower Bay and checks in. Meanwhile, Ray flees from the hospital and pawns the ring he was planning to propose to Julie with in exchange for a revolver. That evening at the hotel's bar, Julie is singing karaoke when the words, "I still know what you did last summer" roll on-screen. Terrified, she runs back to her room. Will confesses he likes Julie.
After murdering a dockhand named Darick, Ben slices Olga, the housekeeper, dragging her into a room. While the others get into a hot tub, Julie finds Darick dead in the closet of her room. Horrified, she informs them, but Darick's body is missing; Mr. Brooks, the hotel manager, refuses to believe her story. Mr. Brooks notes they are unable to leave the island due to an incoming storm. By the pool, Titus Telesco is murdered. Ray, who has survived his injuries, heads out to rescue Julie.
The next day, the group rescues Julie after Ben locked her in a tanning bed. They find Olga, Titus, and Mr. Brooks murdered, the two-way radio—their only way of contact—destroyed, and the boats missing from the docks. Julie then confesses to the group about the incident two years prior. The group goes to the room of Estes, the boat hand porter, and finds that he has been using voodoo against them. Estes explains he was trying to protect them after realizing that their answer to the radio station's question was incorrect, indicating that Julie was set up to be drawn to the island. He tells them that Ben's wife, Sarah, was found murdered and that he allegedly killed her after catching her cheating. Estes goes missing and Will volunteers to find him, while Ray takes a boat to the island. Julie, Karla, and Tyrell return to the hotel and find Nancy, the bartender, hiding in the kitchen.
Ben appears in the kitchen and kills Tyrell. The girls retreat to the attic, where Karla is attacked by Ben. Julie and Nancy rescue Karla and run to the storm cellar, where they find Ben's victims. Will bursts in and takes the girls back to the hotel, stating that he saw Ben on the beach. At the hotel, Will tells them that Estes attacked him and he is bleeding from the stomach. Nancy and Karla leave to find a first aid kit, but find Estes impaled with a harpoon. Ben appears, kills Nancy and attacks Karla. While Julie tends to Will, he tauntingly reveals that it is not his blood and that he was the radio host and had killed Estes.
Will drags Julie to a graveyard, where he reveals that he is Ben's son. Ben appears and attacks Julie before Ray arrives and engages in a fight with Will. When Ben tries to stab Ray, he accidentally kills Will instead. While Ben is distraught from killing his son and preparing to kill Ray, Julie shoots him dead. Back at the hotel, Karla is found alive and they are rescued by the coast guard.
Some time later, Julie and Ray get married and buy a home. While Ray is brushing his teeth in the bathroom, Julie sits down on the bed and looks in the mirror, seeing Ben underneath. She screams as Ben pulls her under the bed.
