After the success of the first film, Damien Leone planned for years to make a follow-up; this led to Terrifier 2 coming about.

The success of the first film helped Leone raise $125,000 in crowdfunding while getting $125,000 from private investors. Already increasing the budget by over $200,000 from the first film.

The film begins after the events of the first film. After coming back from the dead, somehow, Art the clown kills the mortician who was about to inspect his body. Covered in blood, he goes to the laundrette to clean his clothes, where he encounters a little pale girl who is dressed in a similar fashion as him and seems only he can see. They later kill a customer at the venue. This introduces Art as a mystical creature now.

One year later, we meet our protagonist, Sienna Shaw; she’s working hard on a costume for Halloween. A winged Valkyrie costume which we find out is based on a character drawn by her late dad in his sketchbook. Her younger brother, Johnathan, is obsessed with Art the Clown after finding him in his dad’s sketchbook, which worries Sienna and her mother.

That night, Sienna has a dream about Art. In a place called “Clown Cafe”, where he kills the people in the cafe. She pulls out a sword which her dad left her but wakes up to find her dresser with her costume on fire but leaving the sword untouched.

Sienna is affected emotionally by the fire. Later that day, Jonathan sees Art and the pale girl as they cut open a possum, making Jonathan run away and getting the blame for the possum and in trouble with the school and his mother.

Sienna and her friend, Allie, go to a costume shop to help Sienna pick out new wings for her costume, which was destroyed. Sienna encounters Art, and when Sienna leaves, he kills the worker at the shop.

Allie is home alone and handing out sweets to trick-or-treaters when Art knocks, and Allie refuses to give him any, but Art keeps knocking until she does. Later, Art breaks into her house for the most brutal scene in the film and the series up to that point. Art brutalises her, cutting off limbs and scalping her when he then pours bleach on her and rubs salt into her wounds, leaving her alive. Her mother later finds her before Art kills them both.

While his mother is shouting at him, Jonathan shows his mother his dad’s sketchbook with Art in it and a photo of Art’s first victim, a little girl who it appears is the little pale girl, and she rips it up after he says Sienna’s sword must be the key to stopping Art. She slaps him, causing Johnathan to run away as Sienna heads to her party.

At the party Sienna’s other friend, Brooke, spikes her drink, which makes Sienna freak out after she spots the pale girl. As Brooke’s boyfriend, Jeff, drives her and Sienna home, the pale girl calls Sienna, mimicking Jonathan’s voice, luring them to an abandoned theme park where they have Jonathan tied up.

When they arrive, Sienna goes off alone looking for her brother. Art appears and kills Jeff, and Brooke runs into the park to find Sienna. Art finds her, and they get into a fight, but Art knocks her unconscious.

When she wakes up, she sees Art stabbing Jonathan and starts attacking him with Jonathan’s help, but Art is immortal. Art grabs Sienna’s sword and stabs her with it and proceeds to throw her down to “hell”.

While there she sees everyone from the clown cafe before she is brought back by the powers of the sword. Sienna chops Arts head off with the sword, seemingly killing him.

In a mid-credit scene, Victoria from the first film, who is now in an institute, gives birth to Art’s head, reviving him.

The film had a limited theatrical release which was meant to last one week but was extended by another two weeks for a three-week run. It grossed $15 million at the box office and made a reported $4 million in DVD, Blu-Ray, and home box office sales.