Jake, the only survivor from the second film, is under the care of Dr. Sullivan in an asylum. He is locked in his room following several escape attempts and is attacked by Kayako. The attack is seen on security cameras, although Kayako cannot be seen, and Jake is dead by the time Dr. Sullivan arrives with a security officer. News of the incident reaches a young woman in Tokyo, Naoko, who is the sister of Kayako. Believing that her sister is responsible, she travels to Chicago.
The apartment building where Jake lived is under renovation. Of the few residents who remain, some glimpse Toshio. One is drowned by Takeo Saeki and is never again seen. Dr. Sullivan, while investigating Jake's death, speaks with residents and finds that others have seen the little boy of whom Jake spoke.
Naoko moves in as attacks continue against the residents and anyone associated with them. She tells the landlord's family that the curse now resides in the apartment and tries to convince them to participate in an exorcism. The landlord's sister, Lisa, refuses to cooperate but reconsiders when she realizes that her brother, Max, is possessed by the spirit of Takeo Saeki, the evil husband of Kayako and the source of the curse. Naoko warns that the ceremony must not be interrupted and tells Rose that she must drink Kayako's blood. Lisa disallows this. Takeo, as Max, realizes what Naoko is attempting and attacks and kills her. Lisa is chased by Kayako until, just as Kayako is about to kill Lisa, Rose drinks Kayako's blood which causes her curse to disappear.
Max returns to his senses and sobs over what he has done, but Naoko's murder has begun a new curse. Her ghost attacks and kills him. The film ends with Kayako shown to be in possession of Rose.
Who drinks Kayako's blood?
Rose