Long time ago, the whole world was full of evil creatures until God came and banished them. All the creatures were fused into one and then split into two, Mother and Otoshigo. While Otoshigo was sent to the sea, Mother was sealed in a cave on the island located in the Underworld. Seven seals surrond her location, preventing her from getting out.
She used creatures know as Avatars to manipulate men into breaking the seals. One Avatar based on Kanae, the deceased wife of Ryuhei Mikami, tried to manipulate his son Shu Mikami, however, the plan failed and both Kanae Avatar and Shu fell in the sea. In fury, Mother unleashed a red tsunami based on the red water from the first game, sending all the humans into a alternate dimension.
Years later, another Avatar was made called Ryuko who goes to Tokyo to find a man to manipulate. Unexpectedly, Ryuko finds herself immersed in human life and abandons her objective. Two years later, the avatar Yuri is made, and finds and murders Ryuko for disobeying her nature. Yuri makes her way to Yamijima, where she eventually comes across Mamoru Itsuki and is successful in making him break the seven seals, creating a portal to the Underworld. Sometime later, Yuri betrays Mamoru and reveals her true nature.
Later, Mother brutaly kills Shu by "eating" him, releasing various Yamirei next. The portal is later closed by Mamoru and Ikuko thus preventing Mother and countless Yamirei from entering the alternate Yamijima reality, save for the many Yamirei that have entered the realm. Mother is able to escape the Underworld and plans to use the Spider's Thread, a gigantic tower, to cross over to the real world via a portal in the sky intercrossing both realities. She aims to do this before the fake Yamijima reality collapses around her.
Making her way up the tower, she inadvertantly knocks an Otoshigo-possessed Ichiko Yaguri off the Thread, and comes upon Mamoru and Ikuko. Wishing for them to be gone, she sends them into a realm of her own creation, where she fights them. Ayiko possessed by Kanae finds herself in this plane, looking for Shu, who is also there as a spirit looking for Kanae while surveying the fight. Ayiko, able to regain some control, stabs herself with the Annaki Remains she has with her, which kills her and hurts Mother.
This causes the Annaki Remains Mamoru and Ikuko have to transform into swords. Armed with their new weapons, the two stab Mother, killing her. Upon her defeat, the sound of a siren blazes as a red wave washes over Mamoru and Ikuko, sending them to a reality where Mother never existed. Mamoru wakes up on the shore of the island before reuniting with Ikuko, who is unconscious. Ikuko awakens and sees the sun dawning over the ocean, but she looks as though it causes inconvenience for her, hinting that Mother was able to take over her body before dying.