During the night, Barbara (Lorissa McComas) and her boyfriend David (Richard Israel) sneak into a closed down army test site, and discovered a pool. They go swimming, but are attacked and killed by an unseen force in the pool. The next day, J.R. Randolph (Monte Markham) the uncle of Barbara, hires private investigator, Maggie McNamara (Alexandra Paul), to investigate the incident, believing it to be a runaway.
Maggie searches the area for any possible witnesses, eventually stopping by local homeowner Paul Grogan, (William Katt), asking for any knowledge of the girl's disappearance. He claims to have not seen her, but leads her to the army test site where they discover the pool. They enter to look for any clues, until Maggie thinks they should drain the pool. As she starts the draining. a scientist named Dr. Leticia Baines (Darleen Carr), encounters them and attacks Maggie and Paul to stop the draining but is too late to do so. They investigate the bottom of the pool and discover a skeleton, which they believe is that of a dog. Baines steals the jeep, but crashes after losing consciousness. Moments after, Paul's friend Jack (James E. Brodhead) was severely attacked by the same unseen force when they we're released from the pool into the lake. Then Paul and Maggie take Banes to town across the lake on a raft, they find Jack dead with both his legs stripped to bone, bled to death while crawling to his yard. Later that night, she wakes up and informs them that a school of piranhas lived in the pool that they had drained, and are assumed to be headed to the river.
During the rafting on a lake, Brandy, Jack's dog notices the piranha knowing what they are, jumps in the water to attack 'em, but was killed. But one piranha was killed, then Paul discovered it taking it out of the water, knowing the truth. Later, a fisherman was attacked by the piranha while his son was in the canoe, when it tipped over, the boy made it to the top of the canoe while his father was being devoured. Paul, Maggie and Banes see's the boy, while the canoe was sinking, Banes dove in to save him, and sacrificed herself to the piranha. They pulled the boy and Banes out of the water, but died. During the rafting, the piranha started chewing the ropes of the raft after smelling the blood of Banes, they all made it ashore after the raft was taken apart. Then Paul ran to the dam to prevent the water from being flooded into the lake, he made it in time.
Paul, knowing his daughter Susie (Mila Kunis) was at a scout camp just downstream of the river joins Maggie and Paul to visit Randolph and try to convince him to shut down a grand opening of a resort just downstream. They fail, and have to make many twists and turns to try and save people downstream. On the way to warn people of the piranha, Maggie and Paul are arrested after Randolph had claimed that they lied about the piranha, dismissing it as "nonsense". They eventually escape from custody to warn the people of Lost River.
The piranha first make their way to the camp, attacking the kids. Susie takes a raft and saves her friend Darlene. Darlene tries to save Laura (Soleil Moon Frye) but she falls in and the piranha kills her. Maggie and Paul make it to the camp. Paul grabs a canoe and saves his daughter and the kids. Maggie calls the resort to warn them of the danger but is ignored. She and Paul drive to the resort themselves but arrive too late; the school of piranha having killed most of the swimmers. Randolph now sees and realizes his mistake.
Maggie and Paul take a speedboat to the latter's old workplace, to open the valve containing toxins and spread them into the lake, in attempts to kill the piranha. Upon arrival, the control room is flooded, and Paul must swim under to it and release the valve while Maggie stays in the boat counting to 200 before pulling him out. The piranha attacks Paul but he successfully releases the valve, spreading the toxins. Maggie starts the boat's engines, pulling Paul away from the piranha school. As Maggie pulls out the rope, she discovers that it was cut loose, making her think that Paul didn't make it. A mortally wounded but alive Paul surfaces from the water. J.R. Randolph then commits suicide after he discovers that he will face legal action.
After the horrific incident, the Mayor of Lost River announcing that the Piranha somehow are all dead, but then at the ocean the trilling sounds of the Piranha are heard, and turns out that half the Piranha have survived, and made their way to the ocean.Alexandra Paul as Maggie McNamara
William Katt as Paul Grogan
Darleen Carr as Dr. Leticia Baines
Soleil Moon Frye as Laura Dickinson
James Karen as Governor
Mila Kunis as Susie Grogan
Kehli O'Byrne as Gina Green
Richard Israel as Dave
Kaz Garas as Sheriff
Leland Orser as Terry Wechsler
Ben Slack as Earl Lyon
James E. Brodhead as Jack
Monte Markham as J.R. Randolph
Lorissa McComas as Barbara Randolph
Rather than shoot new special effects for the film, executive producer Roger Corman recycled the special effects from the original. The screenplay is nearly identical to that of the original, but removes all of the humor and comedy. Dante and producer Jon Davidson expressed a dislike for the film in the audio commentary on the DVD for the original.