Kingdom Hearts II begins one year after the events of Kingdom Hearts and Kingdom Hearts: Chain of Memories, and starts where Kingdom Hearts 358/2 Days ended. Sora, Donald, and Goofy have been asleep in suspended animation for the past year to regain their lost memories. Meanwhile, Roxas, the Nobody of Sora,[17] is trapped in a virtual simulation of Twilight Town created by DiZ so that he may merge with his original self to restore Sora's power,[18] done as part of DiZ's revenge on Organization XIII.[19][20] DiZ's plans are threatened when Organization XIII's Nobodies, led by Axel, Roxas's former friend in the Organization, infiltrate the virtual town, but Roxas finally merges with Sora. Sora, Donald, and Goofy wake up in the real Twilight Town and meet King Mickey and Yen Sid, who send them on another journey. Their goal is to find Riku and stop the plans of Organization XIII, who control the Nobodies—the body left over when a person with a strong heart is turned into a Heartless. Sora also receives a new set of clothes that allow him to fuse with party members to gain special abilities. Afterward, Maleficent is resurrected and joins with Pete to continue her quest for power.

Sora travels to many Disney-themed worlds, old and new, and resolves the troubles caused by Organization XIII, the Heartless, Maleficent and Pete, and local villains. Meanwhile, Kairi is kidnapped by Axel. During a visit to Hollow Bastion, they again meet King Mickey, who reveals the true nature of Ansem, the antagonist of Kingdom Hearts. The Ansem whom Sora defeated was actually the Heartless of Xehanort, a student of Ansem the Wise. Mickey also reveals that Xemnas, the leader of Organization XIII, is the Nobody of Xehanort.[21][22] Organization XIII's plan is revealed: they seek the power of "Kingdom Hearts", which is the sum of all the hearts that Sora released by destroying the Heartless with his Keyblade.[23] Sora then revisits the worlds to solve lingering problems and new complications, while seeking a path to Organization XIII's base of operations. Throughout his endeavors, Sora is secretly aided by a mysterious hooded figure whom Sora believes to be Riku.

Sora, Donald, and Goofy enter a passageway through Twilight Town and encounter Axel, who sacrifices himself to create a passageway to the World That Never Was, the headquarters of Organization XIII, with Kingdom Hearts looming overhead as a heart-shaped moon. Sora finds Kairi and Riku, whose appearance has been changed by the darkness to that of Xehanort's Heartless; he also reveals to Sora the nature of his connection to Roxas. King Mickey meets DiZ, who reveals himself to be Ansem the Wise.Ansem uses a device that dissipates some of Kingdom Hearts' power, but after a system overload causes the machine to begin a self-destruct sequence, he realizes the nature of the heart and apologizes to Sora, Riku, King Mickey, and Roxas for his mistake before the Kingdom Hearts Encoder explodes and obliterates him; the explosion also miraculously restores Riku to his original form.[25] At the top of the Castle that Never Was, Sora and his friends battle Xemnas, who uses the remaining power of Kingdom Hearts to power his multiple forms.[26] After Sora and Riku are separated from Kairi and the others, the two friends destroy Xemnas once and for all and are reunited with their friends at their home, Destiny Islands.The game concludes as Sora, Kairi, and Riku read a mysterious letter bearing King Mickey's seal.