Elwood Blues is released from prison after serving eighteen years for the events of the previous film and is informed that his brother, "Joliet" Jake Blues has died. He is picked up by Matara, a friend who works for his former drummer Willie Hall and wishes to help him get back on his feet. Before meeting up with Willie, Elwood requests to be dropped off to see Sister Mary Stigmata, who is now working at a hospital after the orphanage was closed. She reveals that Curtis has also died but fathered an illegitimate son Cabel Chamberlain, who is an Illinois State Police commander, and introduces him to an orphan Buster to suggest mentoring him.
Against Stigmata’s advice, Elwood tracks down Cabel at his police department to inform him of his real father and asks him to join The Blues Brothers Band that he plans on reforming. Cabel, upset by the news and offended by the suggestion to join him after seeing Elwood's and Jake's criminal history, throws him out of the building where Buster steals his wallet containing enough money for Elwood to purchase a new Bluesmobile (this time, being a 1990 Ford Crown Victoria).
Elwood and Buster begin tracking down members of the former band to recruit them from their current jobs. Willie runs a strip club and joins after it is burned down by the Russian mafia because Elwood enlisted the help of Willie’s barman "Mighty" Mack McTeer to try and convince them to leave the club alone. Another member Matt "Guitar" Murphy joins again at the advice of his wife who now run a Mercedes-Benz dealership together. Three members work at a radio station and quickly agree to join, and finally Murphy Dunne joins after his boss at call center gives him permission.
The newly reformed band uses their old agent to book them a show. On the way to the show they are followed by Cabel and the Illinois state police who are now looking for Elwood for stealing Cabel’s wallet earlier, and believing that he has kidnapped Buster. While avoiding the police Elwood interrupts a Militia group meeting unintentionally destroying their boat full of explosives they planned to use. The Band arrives at the show to find they have been mistakenly booked as a Bluegrass Band but perform the show anyway. Afterward they evade capture by the police, but they catch up with them at a Tent revival where Reverend Cleophus James is preaching. Before Cabel can arrest them he has an epiphany brought on by Reverend Cleophus that he should join the band instead of being a police officer. The Band evades capture once more now with Cabel joining them who the police believe they have brainwashed.
The band continues on to their next booking, a tryout for a Battle of the Bands put on by Queen Mousette who Mack informs is allegedly a 130 year old voodoo witch. Queen Mousette requests the band play something Caribbean, and when Elwood begins to explain they don’t play that kind of music, she casts a spell on them to play anyway. Mousette accepts the band into the battle, however Elwood, Mack, and Cabel are turned to stone statues.
At the show, Queen Mousette undoes the spell to allow The Blues Brothers band to play against The Louisiana Gator Boys; a supergroup of blues musicians to whom they lose the battle. After the battle the show is interrupted by the arrival of the Russian mafia and the Militia group from earlier who are turned into rats by Queen Mousette. The Illinois state police arrive but stand down after Cabel informs them that he is all right. Elwood suggests that two bands jam together on stage, and uses the performance as cover when Sister Mary Stigmata arrives to say goodbye to Cabel and Mack and escape with Buster with the police giving chase.
Kathleen Freeman, Frank Oz, Steve Lawrence and Jeff Morris appear in cameos, all reprising their roles from The Blues Brothers film. Nia Peeples portrays a state police officer, Darrell Hammond a militia member and John Lyons a Russian thug. The film is dedicated to John Belushi, Cab Calloway, and John Candy, cast members from the original film who had died prior to the sequel's production.
Blues Brothers 2000 made it into the Guinness Book of Records for the biggest car pile-up, a record previously held by the original film. Approximately 60 cars were used in the scene after Elwood says to the band, "Don't look back." Inevitably, everyone looks back and sees the massive pile-up. Portions of this scene were filmed in Niagara Falls, Ontario.
The film was originally intended to include Brother Zee Blues (Jim Belushi, brother of John Belushi). But due to an already existing television deal (Belushi had been cast in the ABC drama Total Security), Belushi was unable to appear and the script was altered to include Cab Blues (Joe Morton). This character was named Cabel as an homage to Cab Calloway, who died four years prior to the film's release. (His character Curtis was revealed to have died in the film along with Jake.)
The band's original keyboardist, Paul Shaffer, had been committed to Gilda Radner's one-woman show on Broadway and was therefore unable to appear in the first film. He was replaced by actor-musician Murphy Dunne. Shaffer does appear in Blues Brothers 2000, taking a week off from Late Show with David Letterman to film his role as Queen Moussette's aide, M.C. of the battle of the bands (Warren Zevon took his place that week on Letterman's show). Shaffer shaved his head for the role, a change in appearance he chose to keep permanently.
During the Funky Nassau number, Shaffer in his character as "Marco" asks to cut in on keyboards, which Murph allows. This marks the first on-screen time that the Blues Brothers Band plays with the original keyboardist.
Several cast members from the first film reprised their characters, including Frank Oz, Jeff Morris, Steve Lawrence, Kathleen Freeman, Aretha Franklin, and James Brown.
Blues Brothers 2000 was screened out of competition at the 1998 Cannes Film Festival.
The film grossed a little over $14 million in box office sales in North America.
The film received mixed reviews, averaging a 47% positive rating at Rotten Tomatoes based on 45 reviews, and a D score from Entertainment Weekly. Roger Ebert gave the film 2 stars, saying, "The film is lame comedy surrounded by high-energy blues (and some pop, rock and country music)."
A Blues Brothers 2000 video game was released for the Nintendo 64 on November 17, 2000, two years after the film's release. The plot of the game involves Elwood as the main character going through different chapters and levels while trying to save the kidnapped members of the band one by one. Like the film on which it based and the video game based on the first film, it was poorly received.