The film did not perform as well as the original, totaling $17 million in the US by the end of its theatrical run whereas the original made $19 million in its opening weekend.
Shortly after the events of Hostel, Paxton (Jay Hernandez) is suffering from nightmares as a result of PTSD and lives in seclusion with his girlfriend Stephanie (Jordan Ladd). The two get into an argument when Stephanie denounces Paxton's paranoia as exaggerated and insufferable. She wakes up the next morning to find Paxton decapitated. An unmarked box (presumably containing Paxton's severed head) is then delivered to Elite Hunting boss Sasha (Milan Kňažko), as he relaxes at an outdoor cafe.
In Italy, three art students, Beth (Lauren German), Whitney (Bijou Phillips), and Lorna (Heather Matarazzo) are convinced by Axelle (Vera Jordanova), a nude model they are sketching, to join her on a luxurious spa vacation, redirecting them from Prague. The four travel to a small Slovakian village and check into the local hostel, where the desk clerk uploads their passport photos to an auction website. American businessman Todd (Richard Burgi) submits the winning bids on Whitney and Beth for himself and his passive best friend Stuart (Roger Bart).
Later that night, at the village's Harvest Festival, Lorna discovers that Beth has inherited a vast fortune from her mother. Stuart and Todd go to the festival, where Stuart approaches Beth and the two share a friendly, albeit awkward, conversation. Despite being warned about her safety from Beth, an intoxicated Lorna leaves to go on a boat ride with a local named Roman, who kidnaps Lorna with the help of two accomplices. Beth and Whitney leave the party, and Axelle volunteers to stay behind and wait for Lorna. Whitney wants to have sex with a local named Miroslav (Stanislav Ianevski), but Beth convinces her otherwise, stating that Miroslav is too "shady".
The next morning Beth, Whitney, Axelle, and Miroslav head to the local spa to relax. Meanwhile, a nude Lorna is hung upside down with her wrists chained behind her back. A woman named Mrs Bathory (Monika Malacova) enters the room, and lies naked in a bathtub beneath Lorna. She then uses a long scythe to repeatedly slash Lorna's back, and revels in bathing in her blood, before finally slashing her throat.
Beth, who dozed off, wakes up to find herself alone and her belongings stolen. While looking for her friends, she notices several men approaching her. Fearing for her life, she climbs over the spa walls. While escaping, she is ambushed by a gang of violent street children known as 'the Bubblegum Gang' but Sasha and Axelle arrive and save her. After Axelle and Beth leave, Sasha executes one of the children.
At Sasha's mansion, Beth realizes that Sasha and Axelle are responsible for Whitney and Lorna's disappearances after seeing the men who tried to kidnap her at the spa coming up the stairs. She tries to hide and discovers a secret room filled with severed heads, including Paxton's, before she is captured and taken to the factory.
Having been notified via pager, Todd and Stuart are chauffeured to the factory. Stuart enters his room where Beth is strapped to a chair with a sack covering her head. After looking around the room in horror he takes the sack off Beth's head and explains what is going on. He unties her from the chair and almost decides to let her escape, but knocks her out and restrains her, having decided to take his anger for his domineering wife out on Beth.
Meanwhile, Todd gleefully terrorizes Whitney with a power saw but loses his nerve after accidentally cutting through part of her scalp. Horrified by what he has done, Todd tries to leave, but one of the guards reminds him that he is contractually obligated to kill her and cannot leave until he does so. Todd angrily refuses, prompting the other guards to turn savage dogs loose on him, who maul Todd to death. The Elite Hunting representatives try to find someone else to finish off Whitney, inquiring whether an Italian man (Cannibal Holocaust director Ruggero Deodato) who is eating Miroslav alive, and a man who has his victim chained to an electrified metal bed are interested.
Stuart is approached by The Elite Hunting representatives, and after discovering that Todd has been killed, a now deranged and sadistic Stuart accepts the offer and beheads her. When Stuart returns Beth seduces him into releasing her from the chair. Stuart attempts to rape her, but she fights him off and chains him to the chair instead. Beth demands that Stuart tell her the code to the cell door, and sticks a needle in his ear when he refuses. Stuart eventually tells Beth the code, but she still needs to be buzzed through, which inadvertently summons Sasha and the guards to the room. Beth offers to buy her freedom with part of her inheritance, but Sasha explains that in order to leave she must also kill someone. When Stuart insults Beth she cuts off his genitals and tosses them to one of the guard dogs, leaving him to bleed to death. Per the standard contract Beth is given an Elite Hunting tattoo, making her an official member.
In the closing sequence, Axelle is lured from the village festival into the woods by the Bubblegum Gang, where she is surprised by the revenge-seeking Beth, and beheaded with a two-headed axe. Beth then leaves as the Bubblegum Gang starts playing soccer with Axelle's severed head.
Director Eli Roth, his brother Gabriel, and co-producer Dan Frisch make cameo appearances as heads on sticks. Derek Richardson, Eyþór Guðjónsson, Rick Hoffman, Jana Kaderabkova, and Barbara Nedeljáková make flashback cameos at the beginning of the film as their original roles in the first film.
Roth shot scenes for the film in the Prague online brothel Big Sister and at the Blue Lagoon in Iceland.
Lionsgate screened the first five minutes of Hostel: Part II before select screenings of Bug, which opened on May 25, 2007.
In one of the trailers, the narrator says "It's only a movie." It was promoted in commercials on TV as having "the most shocking ending in horror movie history".
Director Eli Roth and cast member Phillips attended UFC 71 during which the film was promoted.
At the date of the U.S. premiere on June 8, 2007, interviews with the Hostel: Part II director Eli Roth were released at Big Sister.
Hostel: Part II performed worse than the first film, part of what the Los Angeles Times called a slump in horror films. It opened in 6th place with $8.2 million and went on to total $17.6 million by the end of its theatrical run. Comparatively, the original opened at #1 with $19 million ($2 million more than Hostel: Part II's final gross) and went on to make over $47 million.
Director Eli Roth blamed piracy for the film's box office results.
Review aggregator website Rotten Tomatoes gave the film a 44% approval rating based on 110 reviews; the average rating is 5/10. The site's consensus states "Offering up more of the familiar sadism and gore, Hostel: Part II will surely thrill horror fans." The film was nominated for two Golden Raspberry Awards in the fields of Worst Excuse for a Horror Movie and Worst Prequel, Remake, Rip-off or Sequel, but lost to I Know Who Killed Me and Daddy Day Camp, respectively.
The film has been restricted to adults in most countries. However, it has been cut in Germany, Malaysia, and Singapore, and the "German Extended Version" (in which Lorna's torture and death scene is still not shown completely) has subsequently been banned in Germany. The court in Munich decided that releasing the movie in this or the uncut version is to be punished. Only a heavily edited "not under 18" version is still available. It was banned in New Zealand, after the distributor refused to cut the scene showing the torture of Lorna to receive an R18 certificate. The film, with the scene in question edited out, was later released on DVD on April 30, 2008.
On October 8, 2007, the film was cited in the House of Commons of the United Kingdom as an example where stills from the film could be illegal to possess under the proposed law to criminalise possession of "extreme pornography". MP Charles Walker claimed that although he had never seen the film, he was "assured by trusted sources" that "From beginning to end it depicts obscene, misogynistic acts of brutality against women".
Writer and attorney Julie Hilden defended Hostel: Part II critically and artistically in her essay "Why are critics so hostile to Hostel: Part II?".
Former Slovak Minister of Culture and actor Milan Kňažko played Sasha, the head of the torture ring. He also defended the first film.
In June 2008, it was announced that Scott Spiegel, one of the producers of Hostel and Hostel: Part II, was in talks to write and direct a third film in the series. In July 2009, Eli Roth confirmed that he would not be directing Hostel: Part III. Total Film later reported that Roth would be involved, albeit as producer only, and that the film will abandon the European locations of the previous films in favor of an American setting. A trailer for Hostel: Part III was released in October 2011 confirming the film's Las Vegas setting. Part III was released direct-to-DVD on December 27, 2011 in the United States, and on January 18, 2012 in Europe.