Picking up fifteen years after the events of the first movie The Blob, an oil pipeline lawyer named Chester (Godfrey Cambridge) returns to his suburban Los Angeles home from the North Pole, bringing with him a small sample of a mysterious frozen substance uncovered by a bulldozer on a job site. Prior to taking the substance to a lab to be analyzed, he places the storage container with the substance in his freezer, but he and his wife (Marlene Clark) accidentally let it thaw, creating a second Blob. It starts by eating a fly, then a kitten, then Chester's wife, and then Chester himself (while, in an intentional anachronism by the film makers, he is watching a television broadcast of the film The Blob).
Lisa (Gwynne Gilford), a friend, walks in to see Chester being consumed by the Blob. She escapes, but cannot get anyone to believe her, not even her boyfriend Bobby (Robert Walker Jr.). Meanwhile, the rapidly growing creature quietly preys upon the town. Some of its victims include a police officer and two hippies (Cindy Williams and Randy Stonehill) in a storm drain, a barber (Shelley Berman) and his client, transients (played by director Hagman, Burgess Meredith and Del Close), a Scoutmaster (Dick Van Patten), a farm full of chickens and horses, people in a gas station, and various townspeople who turn up "missing".
At one point, Lisa and Bobby find themselves trapped in Bobby's truck with the creature attempting to find a way inside. While panicking, the truck's air conditioning is accidentally switched on and the Blob retreats because of its vulnerability to cold.
The now-massive Blob then invades a bowling alley and a skating rink (consuming dozens more people in the process). It is finally stopped when Bobby activates the rink's ice mechanism, freezing it. While the frozen Blob is being filmed by a television crew, one of the crew's bright lights is positioned on the ground, melting a small portion of it, which oozes toward the sheriff and envelops his feet as he is speaking on camera to a nationwide television audience.