Gaylord "Greg" Focker (Stiller) is preparing to celebrate his twins' fifth birthday party. Things seem to go awry when Greg's father-in-law Jack Byrnes (De Niro) visits. Recently, Jack has been diagnosed with a heart condition and become embittered by his daughter Debbie's divorce from her husband, Bob (whose marriage was the social event in the first film and how Jack and Greg met), for cheating on her with a nurse. Jack's plan was originally to name Bob as his successor as head of the Byrnes family, but decides to pass the role to Greg, naming him "The Godfocker." Despite Greg reluctantly accepting the role, Jack again resumes his spying on Greg, and begins to suspect him of infidelity when he sees him with a drug representative, Andi Garcia (Alba), who openly flirts with him, and the presence of Sustengo erection pills in Greg's house, which prompts Jack to think Greg is no longer sexually attracted to his wife, Pam (Polo). Furthermore, Jack starts to doubt Greg's ability to provide for his family when he appears reluctant to send his children to a private school.
During a medical conference promoting Sustengo, Greg meets Bob at a bar. Bob tells Greg of Jack's original intention to name him as successor, "The Bobfather," and expresses relief and happiness at leaving Jack's family, which makes Greg slightly uncomfortable. Jack, for his part, begins speaking with Pam about the possibility of divorcing Greg and renewing her relationship with her ex-fiancÃ©, Kevin Rawley (Wilson). Eventually, following a row at a clinic, Greg runs away from home to his and Pam's unfinished new house, where he is paid a brief visit by Andi, who tries to cheer him up with takeout and wine, but Andi soon becomes so drunk that she makes an aggressive sexual pass at Greg. While looking for Greg, so he can apologize to him and bring him home, Jack pulls up to the house and sees, through the window, what looks to him like Greg and Andi having sex, when, in reality, Greg is trying to rebuff Andi's advances. Disgusted, Jack merely leaves, but tells Dina and Pam that he was unable to find Greg.
At the twins' birthday party, Greg's parents, Bernie (Hoffman) and Roz (Streisand) rejoin the family, but Jack, enraged at Greg's apparent infidelity, engages Greg in a physical fight, despite Greg's claiming that Andi was drunk and that he was rebuffing her. The fight culminates in Jack's having a heart attack and collapsing, with Greg quickly taking charge of the situation and caring for Jack. As he is taken away by paramedics, Jack quietly admits that he now believes Greg after feeling his carotid artery, which remained stable while Greg was claiming his innocence. Impressed with Greg for his integrity and his thinking, Jack approves Greg to be the Godfocker.
Four months later, on Christmas Day, Greg and Pam's parents come to spend Christmas with them in their new house. Greg's parents (who are Jewish) give Jack a kippah as his present, informing him that they have traced his family roots while they were nursing him back to health, and discovered that he is part Jewish, which didn't impress Jack very much. Bernie informs Greg and Pam that he and Roz have sold their Miami Island home and are moving to Chicago, only two houses down from their house. Jack and Dina decide they will move, too, because they also want to be close to their grandchildren. The film ends with Greg and Pam trying to wean their parents off the idea.
During the credits, Jack is back in his home on Long Island. He has grown fond of the search engine Google (having used it to do research on Andi earlier in the film). With Mr. Jinx, the family's cat, Jack watches a video of Greg on YouTube in which Greg mocks him at the Sustengo conference. Jack then discovers a remixed version of the video using puns of several of the words in the video, and is slightly amused by it.
Where are Greg and Roz moving?
Chicago