Baron Victor Frankenstein, having survived the fire at the end of the previous film, is housed at an insane asylum where he has been made a surgeon and given a number of privileges, as he holds secret information on Adolf Klauss, the asylum's corrupt and perverted director. Frankenstein, under the alias of Dr. Carl Victor, uses his position to continue his experiments in the creation of man.
When Simon Helder, a young doctor and an admirer of Frankenstein's work, arrives as an inmate for the crime of ‘sorcery’ bodysnatching, the Baron is impressed by Helder's talents and takes him under his wing as an apprentice. Together they work on the design for a new creature. Unknown to Simon, however, Frankenstein is acquiring body parts by murdering his patients.
Frankenstein's new experiment is the hulking, ape-like Herr Schneider, a homicidal inmate whom he has kept alive after a violent suicide attempt and on whom he has grafted the hands of a recently deceased sculptor. Since Frankenstein's hands were badly burned in the fire, the shabby stitch-work was done by Sarah, a beautiful mute girl who assists the doctor, and who is nicknamed "Angel". Simon tells Frankenstein that he is a surgeon and the problem is solved. Frankenstein reveals that Sarah is Klauss' daughter and has been mute ever since he tried to rape her.
Soon new eyes and a new brain are given to the creature. When the creature – lumbering, hirsute and dumb – is complete, it becomes bitter and intent on revenge. It ultimately embarks on a killing spree in the asylum, killing several individuals, including Klauss. Eventually, it is fully overpowered and destroyed by a mob of inmates. Simon is devastated by the loss of life and reports to Frankenstein; however, the Baron feels that it was the best that could happen to such a creature, and is already considering a new experiment with other involuntary donors. Simon and Sarah watch silently as Frankenstein starts tidying up the laboratory while pondering who should be first to "donate".
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