Ben White (Reb Brown) attends the funeral of his sister, journalist Karen White, the heroine of the previous film. Ben meets both Jenny Templeton (Annie McEnroe), one of Karen's colleagues, and Stefan Crosscoe (Christopher Lee), a mysterious interloper who tells him Karen was a werewolf. Providing videotaped evidence of the transformation – and turning up to destroy Karen as her undead body rises from the grave – Crosscoe convinces Ben and Jenny to accompany him to Transylvania to battle Stirba (Sybil Danning), an immortal werewolf queen. Along the way, the trio encounter Mariana (Marsha Hunt), another lusty werewolf siren, and her minion, Erle (Ferdy Mayne).
Arriving in the Balkans, Ben and company wander through an ethnic folk festival, unaware that Stirba is off in her nearby castle already plotting their downfall. Stirba seems to have witchcraft powers as well as being a werewolf, for she intones the Wiccan chant Eko Eko Azarak. Eventually, the adventurers battle with Stirba in an assault that involves disguised dwarfs, mutilated priests, and supernatural parasites, before Stirba is destroyed by Stefan at the cost of his own life. Ben and Jenny return home, where they become a couple and are greeted by a werewolf disguising as their neighbor's child. They go to the neighbor's house and ask about the child, to which the neighbor replies that he has no child, confirming their suspicions that the child was, in fact, a werewolf.
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