It has been five years since Terry (now known as Terrence) and his friend, Glen, accidentally opened up the Gate in Glen's back yard. Glen's family has moved away, and Terrence's broken family has grown worse. Still grieving over his mother's death, and with his dad wallowing in alcoholism, Terrence finds himself increasingly drawn to the evil portal and the power it possesses.
Terrence breaks into Glen's old house and begins the ritual to summon the demons and grant him the power to get his father's life back on track. He is interrupted by three other teens who also broke into the house. While John and Moe are content to ridicule Terrence, John's girlfriend, Liz is extremely interested in demonology and convinces her two friends to join Terrence in completing the ritual. Terrence brings a Minion (one of the small creatures that ran amok previously) through the Gate. In a panic, John pulls out his revolver and shoots it, then storms off with his friends in tow. Alone, Terrence finds the Minion's body and takes it home. It survives, so Terrance opts to keep it in a cage as a pet.
The next day, Terrence finds that his wish has seemingly come true. His father, once a proud airline pilot, has given up the bottle and netted a job flying for a major carrier. When Liz comes over later, they discover they can use the Minion to grant any wish they want, but with dire consequences.
Liz burns an effigy of her car pin to make a real one, and John and Moe create money and go pig out at a fancy restaurant after stealing the minion and trashing Terrence's house. The minion gets loose and attacks the boys, infecting them.
John and Moe are transformed into demons. They kidnap Liz to sacrifice her. Previously Liz and Terrence imbued an old jewelry box belonging to his mother as a vessel of light to destroy the darkness.
Terrence is brought to the dark world and greeted by the demonic John and Moe and given the task of killing Liz to complete darkness after being transformed into a demon as well. Terrence fights for himself and to save Liz and hurls the box into the gate. It explodes with light and they are transported back to Earth. Terrence dies.
After the funeral service for Terrence ends, he emerges from the coffin and Liz and Terrence kiss. After they leave, John and Moe also emerge from the coffin. Seeing Liz and Terry together, they state, "Who needs girls?, when you got demons!"Louis Tripp as Terrence 'Terry' Chandler
Simon Reynolds as Moe
James Villemaire as John
Pamela Adlon as Liz (as Pamela Segall)
Neil Munro as Art
James Kidnie as Mr. Coleson
Gerry Mendicino as Maitre d'
Andrea Ladányi as Minon
Elva Mai Hoover as Doctor
Irene Pauzer as Teacher
Todd Waite as Wine Steward
Layne Coleman as Priest
The Gate II opened in 350 theaters in the US on February 28, 1992, and grossed $2 million. The film was released on VHS in the US later in 1992 by Columbia Tristar Home Video. The film has not received an official DVD or Blu-ray release in the US as of 2017.
Kevin Thomas of the Los Angeles Times wrote that the film "doesn't generate as much fun and excitement as the original", but it is likely to enjoyed by fans of The Gate. TV Guide rated it 2/4 stars and called it "an extended, updated riff" on traditional fairy tales about the dangers of wish fulfillment.