Saw II is the sequel to the 2004 horror/splatter/thriller film Saw. It was released in most parts of the world on October 28, 2005, but not released in Australia until December 1, 2005. Darren Lynn Bousman took over the directing duties of the film, and also co-wrote the story's script with Leigh Whannell, the original film's co-writer.

The film starts off with a man, Michael, (Jenkins) waking up alone, seated in a chair in a grungy, sealed room. A mechanical device is secured around his neck. A nearby TV turns on, showing the familiar "clown" figure Billy the Puppet, the persona used by the killer known as "Jigsaw" (Bell) in the first film. Jigsaw's recorded message tells the man that as punishment for being a police informant, spying upon and betraying others, and for not appreciating life, he has to play Jigsaw's "game". A timer will go off, and the device snap closed, which will kill him by impaling his head with multiple sharp nails (similar to an 'iron maiden'). He is shown evidence - a TV recording and X-rays - that the key to the device has been placed behind his own eyeball while he was unconsciouss; a scalpel has been left to carve the key out from his eye socket, if he chooses to do so. As he gets up from the chair, he triggers a timer built into the device. Terrified and screaming, he tries to cut into his eye for the key, but is unable, and 60 seconds later the device slams murderously shut.

Detective Matthews (Wahlberg) - the police officer to whom the deceased was informant - is called to the scene, and discovers a message instructing him to "Look Closer, Detective Matthews." Matthews spots the name of a local engineering company engraved on the metal contraption, and believes this proves where Jigsaw is hiding. After his initial reluctance, his former partner, Kerry (Meyer), convinces him to join the S.W.A.T. team who are going to arrest Jigsaw.

Jigsaw, a meticulous planner, has booby trapped the building, and laid his plans on the assumption of a police assault. A foretaset of this arises when some of the team are trapped and injured on the stairs, but when they find Jigsaw, he is in very fragile condition due to his advanced stage cancer, and offers no resistance to arrest. As they start to take him away, he invites Matthews and the others to examine an adjoining room, in which they find several monitors showing various rooms of an unknown and unidentified house, with an electronic timer counting down from two hours. One of the monitors shows a room containing eight people, including Matthews' son, Daniel. They are the intended victims in Jigsaw's current game.

The story switches to the room in the house, where the confused, angry captives are recovering consciousness and becoming aware of their surroundings. Amanda (Smith), a survivor from the original film, recognizes Jigsaw's trademark situation, and looks for hidden objects, finding a key and tape recorder hidden behind a panel in the wall. The tape contains a message from Jigsaw explaining their predicament: the air in the house contains a low concentration of sarin, a deadly nerve gas (as used in the real-life gas attack on the Tokyo Subway), and although the house will unlock in three hours, this will not save them, as they will die in two hours unless they find the antidotes that are hidden around the house. They are given cryptic clues that they each have the combination to the safe in the "back of their mind", and that the combination can be found "over the rainbow". The note with the key warns them not to use it to open the door in the room, but Xavier (Franky G), a hot-headed ex-convict, pointedly ignores the message and turns the key in the lock while Gus (Nappo) is looking through the eyehole. The lock is rigged to fire a gun pointing directly at the eyehole, which fires into Gus' eye, instantly killing him. Asked how she knew to look for the objects, Amanda reveals she has had to play one of Jigsaw's games before, and pleads with them that to survive, they have to follow the "rules".

The captives begin to explore the house. Laura (Mitchell) finds a door leading to the basement, with another tape marked for Obi (Burd) which reveals to the group that Obi had assisted Jigsaw to get the others in the house. It explains that there are two antidote syringes inside a large furnace in the room. He tells Obi that, though he may have one syringe for himself, the other is his to donate, but will come at a price. Obi climbs inside to retrieve the syringes, grabs the first, but on trying to retrieve the second, a trap is triggered which closes the furnace door and causes the furnace to ignite. although he breaks the glass he cannot get out beyond his shoulders, and Obi is burned to death. Both antidotes are lost.

Meanwhile, Jigsaw refuses to tell Matthews the address of the video feed, instead saying that to save his son's life, he must play a game. The game is seemingly simple, he just has to sit with Jigsaw — by himself — and listen to what Jigsaw has to say, and if he succeeds at the game, he will get his son back. Matthews refuses, but is cajoled by Kerry to "humor" Jigsaw anyway and buy them time to trace the signal and locate the house.

Through a series of flashbacks, Jigsaw reveals himself to be a terminal cancer patient (and, apparently, was given this news by Dr. Lawrence Gordon from the first film), who attempted suicide by driving his car off a cliff. However, Jigsaw survived the suicide attempt, despite severe injuries. He became aware how people did not appreciate their lives unless they knew it could imminently end. Henceforth, Jigsaw resolved to test the human ability to endure great suffering and show determination, in order to demonstrate that they value the life they have. As Jigsaw talks, Matthews is becoming more agitated, unable to cope with the countdown to his son's likely demise as shown on the monitors.

Jigsaw then reveals Matthews' involvement to the officers in the engineering building: - as a "hard headed" cop, he had framed people for crimes they did not commit, and it is these people, plus Matthews' son, who are in the house, and have not yet realized this connection.

In the house, after forcing open a door into another room, the captives find another tape, this time marked for Xavier. On the tape, Jigsaw condemns him for his life as a drug trafficker and states that if he wants to escape, he must "wallow in the filth that he made others wallow in". Daniel pulls back a bed to reveal a large pit in the floor, full of used syringes (some covered in dried blood). The message says that a key is somewhere in the pit which will open a door concealing another antidote; the door, however, is rigged to a timed lock and will lock permanently in two minutes. Arguing who should go into the pit, Xavier takes hold of Amanda and throws her screaming into the needles, shouting at her to dig through them to find the key. Screaming in the pain brought on by being pierced with dozens of needles, Amanda finally finds the key and gives it to Xavier. He races to the lock, but fumbles, and the door's timer expires, sealing the door locked. Daniel (Knudsen) helps Amanda out of the pit, sobbing with fear and pain.

Meanwhile, after having grown tired of listening to Jigsaw and helplessly watching one captive after another die while the timer runs down, Matthews finally snaps and unleashes his rage on the frail old man. Savagely beaten and battered by Matthews, Jigsaw mutters his "Game over" catchphrase and finally agrees to take Matthews to the house, but only on the condition that it is only the two of them who will go there.

In the house, Xavier is independently trying to find a way to escape. In passing the first victim, he notices a colored number on the back of the neck, and realizes that the combination for the safe has been written on the necks of the individual captives, where they cannot see it. No longer needing the help of the others, he goes insane, stalking the other captives to obtain the different colored numbers written on the back of their necks (the answer to Jigsaw's cryptic clue "You all possess the combination. It's in the back of all your minds.") The colors, representing the colors of the rainbow, will reveal the combination of the safe when put in order. He kills Jonas (Plummer), notes his number and color, and proceeds to go after the others.

Elsewhere in the house, Laura (Mitchell) finds the answer to another cryptic clue given earlier by Jigsaw ("X marks the spot"), before succumbing to the effects of the nerve gas. Addison (Vaugier) examines a photo frame whose glass is cracked in an "X" shape, finding a photo of Daniel and Matthews together, labeled "Father and Son", which has been placed there to explain to them what they had in common, and that Daniel is the son of the officer who had framed them all.

While pursuing Amanda and Daniel, Xavier comes across Addison who has fallen victim to another of Jigsaw's contraptions — a glass box suspended from the ceiling that contains an antidote. On the underside of the box are two holes just wide enough to put an arm through each, once pushed past the blades covering them. She discovers too late that the blades are arranged similar to a Chinese finger trap, preventing her from removing her arms once inside; the metal edges dig deeper into her flesh the harder she pulls. Unable to extricate her arms, she is suspended from the box screaming and bleeding. Xavier reads the number on her neck - and then exits the room she is in, leaves her to die screaming suspended by the wrists from the trap.

Matthews, desperate to rescue his son from the scene on the monitors, leaves the engineering building with Jigsaw without warning the other officers, via a hidden elevator, with the badly beaten Jigsaw providing him directions as they drive. Minutes later, the police finally locate the location of the video feed of the captives and also leave quickly to head for the house, to save the surviving victims.

Elsewhere, Amanda and Daniel (now the sole two survivors of Jigsaw's game other than Xavier), retreat to the room where all the captives awoke. As Xavier attempts to break through the door to get at them, Amanda notices a trapdoor in the floor and the two manage to move the safe and leave the room just as Xavier breaks through. The passagway under the house leads them into the infamous washroom from the first movie, where Xavier finally corners them. The bodies of Adam and Zep, and Dr. Lawrence Gordon's severed foot are still there, in a state of advanced decay and covered with fungus and mold. Daniel slumps against the wall, apparently dead. Amanda tells Xavier that, as Daniel has died, she remains the only person capable of reading his number, and that if he kills her, he won't be able to find out the number on his own neck. Xavier's response is to take his knife and slice the flesh from the back of his own neck so he can read his own number. As he moves in to kill Amanda, Daniel jumps forward, and slits Xavier's throat using the hacksaw from the first movie, killing him.

In the meantime, Jigsaw directs Matthews to the house in which the events have taken place, and gives Matthews the key to get inside. On entering, Matthews finds the dead bodies of the victims littered throughout the rooms.

At the same time, the S.W.A.T. team enter the house from which the video feed is transmitted. Kerry, watching the monitors, is confused because the video feed isn't showing them. As the SWAT team investigate they find a video player and computer equipmewnt, and realize that the monitors were in fact showing a tape recording of earlier events, and the video feed location does not identify where the events were occurring.

Meanwhile, Detective Matthews enters the house through a back door, finds the open trapdoor and goes down to search for Daniel. A shot of a syringe here may explain how Daniel has survived the exposure to the nerve gas. He reaches the darkened washroom, and sees someone lying in the bathtub. He approaches cautiously, but the person inside, wearing the same animal mask from the first film, catches him unawares and stabs him in the leg with a syringe of some kind of drug. Matthews drops to the floor.

The two hour timer next to the monitors at Wilson Steel finally expires and a safe opens, revealing Daniel inside, wearing an oxygen mask, weary and terrified but alive. He had been in the safe in the building all along; had Matthews followed the rules to Jigsaw's "game" and "just listened" as Jigsaw instructed him, he would have found his son "in a safe, secure place" just as Jigsaw had told him.

When Matthews wakes up, he is in the darkened washroom, chained to the pipework. An audio cassette player is lying next to him. Playing the tape, he learns that Amanda has become Jigsaw's protégé and has now taken his place. It was Amanda who was wearing the mask in the washroom. Finding a savior and a father figure in Jigsaw, she will carry on in his work once he dies. In a series of flashbacks it is revealed why Jigsaw was happy to sit back while Matthews destroyed his work, and that it was Amanda who had brought Daniel back to be placed in the safe. As Jigsaw had said, Matthews' son was in a "safe place."

As with Adam in the first film, Matthews is helpless to do anything but understand his loss, and watch as Amanda closes the door on him, leaving him to die in the dark. "Game over," she says, repeating Jigsaw's catchphrase. Matthews, chained to a pipe, is left in the room alone only with the light from his flashlight and his gun now just out of reach. The film closes by showing Jigsaw sitting in Matthews's van, lost to the police, badly beaten, but still smiling in triumph.

Even more so than the previous film, Jigsaw's diabolic "games" require a large amount of planning and a vast amount of improbable fortuitous timing in order to succeed, causing some film critics to liken his murderous schemes to Rube Goldberg machines. That being said, it's been stated a number of times that Jigsaw excessively plans everything out and examines every possible angle, so it's likely that had different events occurred they'd still have a similar outcome. Also, the film bears some resemblances to the 1997 cult film Cube, to some extent, in that the main characters have to escape a boobytrapped labyrinth of unknown construction.

Additionally, some found that characters are reminiscent of past horror films in which the characters act unecessarily in a frenzy for lengthy amounts of time. Note: I Know What You Did Last Summer and other teen horror films.

Regardless, there were a good number of reviewers who enjoyed the film and found it to be superior to the original. "One of the rare instances when a sequel far outshines it predecessor, the follow-up to the wildly successful and even more wildly overrated “Saw” far outshines its source material in terms of complexity, thrills, and basic craftsmanship..."