Following a few years after the first film, Blu and Jewel enjoy life in Rio with their 3 kids, the oldest and music-loving Carla, book smart Bia, and the youngest and mischievous Tiago. Meanwhile, Blu's former owner, Linda Gunderson and her ornithologist husband, Tulio are on an expedition in the Amazon and eventually discover a quick-flying spix's macaw that loses one of its feathers. When word gets out about this through television, Jewel believes that they should go to the Amazon to help their human friends find them. While the kids are ecstatic, Blu is uncertain, but is pressured into going along. Rafael and Nico and Pedro decide to come along. Luiz attempts to follow, but fails. Blu brings a fanny pack full of supplies, one of which he uses mostly is a GPS, much to Jewel's displeasure.
     Meanwhile, the leader of a group that is in a line of illegal logging named Big Boss, discovers Linda and Tulio's expedition to find the macaws and orders his minions to hunt them down to avoid disruptions to their work. Also Blu and Jewel's old enemy Nigel the cockatoo has survived the plane crash from the first film, but now has limited flight and is working as a fortune teller/con artist. When he sees Blu and his family flying overhead of him, he wastes no time deciding to go after them in revenge. He is helped by a silent tamandua named Charlie and a villainous but lovesick poison dart frog named Gabi, the latter of which is in love with Nigel. Blu and his family use a boat to get toward the jungle (with Nigel's first plan of revenge being inadvertently foiled by Charlie), and when they arrive, they find nothing in sight. However, they are eventually taken to a flock of blue macaws that are hiding in a secret paradise land. There, they meet Jewel's stern long lost father, Eduardo, his older sister Mimi, and Jewel's childhood friend, Roberto. Eduardo seems unimpressed with Blu's domesticated behavior.
     While searching for the macaws, Linda and Tulio are eventually trapped by the loggers. Meanwhile, Blu does his best to fit in with the flock, as his family and friends are doing, who are against humans and all things human. Blu fails at Eduardo's survival techniques when the former takes Blu out to train him to be like one of the flock. Meanwhile, after countless attempts to get to Blu, Nigel gets his chance when he lands in an audition hosted by Rafael, Nico, Pedro, and Carla for Carnival while in disguise as a bird named Bob. When Blu tries to pick a Brazilian nut for Jewel, he accidentally tries to get it in the territory of the Spix Macaw's enemies, the Scarlet Macaws led by the hostile Felipe. Blu inadvertently causes war between the two for food when he accidentally hits Felipe with a twig. The war turns out to be just like soccer and Blu incidentally costs the flock the food when he sends the fruit ball into the own's goal, much to Eduardo's frustration.
     After arguing with Jewel over whether to stay in the Amazon or go back to Rio, Blu visits Tulio and Linda's site, where he discovers a broken CB Radio, and is discovered by Roberto (who followed Blu), who accuses him of being a traitor. Despite this, Blu saves Roberto from being run over by a tractor, and sends him to warn the flock as he saves Linda and Tulio. Blu persuades the macaws to defend their homes and they easily outmatch the loggers with help from the Scarlet Macaws and the other animals. Big Boss tries to blow up the trees as a back-up plan, but Blu steals the lit dynamite. Nigel goes after Blu and reveals himself as they are falling down when he tugs on the dynamite. After the dynamite goes off, Nigel tries attacking Blu while they hang upside down from vines. Gabi tries to help Nigel by using Charlie's tongue to slingshot a prehensile-tailed porcupinequill (which they got earlier) with her poison on it to shoot it at Blu, but it accidentally hits Nigel, who gives a Shakespearean death speech before seemingly dying. Gabi tries to commit suicide by drinking her own poison and the pair are seemingly dead. However, Bia points out that Gabi isn't poisonous at all (she was lied to by her parents that she was). As a result Gabi smothers Nigel against his will as he tries to attack Blu. Big Boss tries to escape, but is swallowed by a boa constrictor. With the flock now under Linda and Tulio's protection, Blu and Jewel decide to live in the Amazon with their kids and friends, though still agreeing to visit Rio in the summer. Meanwhile, Nigel is taken back to Rio by Tulio along with Gabi, Luiz finally arrives in the Amazon after hitching a ride with Kipo, and Charlie joins the birds' party.