It begins with the climax of Phoonk that revolves around the clash between good (Sudeep and tantric Zakir Hussain) and evil (Ashwini Kalsekar, who had cast black magic spell on Sudeep's daughter). As we all know that good has won over evil with the death of Ashwini. But that it isn't the end, as thing would be much worse than before.

Phoonk 2 will have Ashwini Kalsekar's ghost killing the tantric Zakir who redeem Sudeep and his family, and haunt Sudeep's wife Amrita Khanvilkar.

Ashwini's ghost seeks revenge and Sudeep is in a perplexed situation, as he cannot harm his wife.