In New York City, a young pizza delivery boy named Keno inadvertently encounters burglars on his route and tries to stop them. The burglars attack Keno, who proves to be a skilled martial artist, but he is soon overwhelmed before the arrival of the Teenage Mutant Ninja Turtles. They vanish after rescuing Keno, tying the burglars up, and taking the pizza he was delivering, leaving behind the money to pay for it.

Leonardo, Donatello, Michelangelo and Raphael, along with their master Splinter, are currently living with April O'Neil while looking for a new place to live after defeating The Shredder. Splinter wants to remain in the shadows, while Raphael thinks they should live out in the open. At a junkyard where the remnants of The Foot and the Shredder's second-in-command Tatsu are hiding out, they are met by their master, who has been disfigured by his previous defeat[a] and vows revenge on the Turtles.

April interviews Professor Jordan Perry of Techno Global Research Industries (TGRI) about a possible toxic waste leak. He assures her that everything is fine, but their scientists secretly discover dandelions which have been mutated by the leak. Freddy, a spy for the Foot Clan posing as April's cameraman, discovers this, collects one of the dandelions, and reports it to his master, who decides to have Perry interrogated. Back at April's apartment, Splinter reveals to her and the Turtles that the canister of mutagen (dubbed "Ooze" by the Turtles) which mutated them 15 years prior was created by TGRI, and they too decide to talk to Perry. The Foot gets to Perry first and kidnap him, salvaging the last canister of ooze in the process. The Turtles attempt to get the canister back, but ultimately fail. Afterwards, Keno gets into April's apartment under the guise of delivering pizza and discovers Splinter and the Turtles.

At the Shredder's hideout, Perry is forced to use the remaining ooze on a snapping turtle and a wolf, which mutates them into Tokka and Rahzar, respectively. With the imminent threat to April's safety by the Foot Clan, the Turtles start to actively look for a new home. After an argument with Leonardo, Raphael breaks off from the group, while Michelangelo discovers the abandoned City Hall subway station and deems it a perfect hideout. Raphael and Keno defy Splinter's orders and implant Keno into the Foot Clan to find their hideout. However, they are caught and Raphael is captured, while Keno escapes to warn the others. When they come, they are ambushed by the Shredder and the Foot; Splinter saves the group, but leaves as they face Tokka and Rahzar, who prove too strong to defeat. Donatello finds a bound and gagged Perry after being tossed into a building by Tokka, and the five of them make a tactical retreat. Once back in their hideout, Perry explains that the creation of the ooze was an accident, disheartening Donatello, Leonardo and Raphael, who saw a higher purpose for their existence.

The Shredder unleashes Tokka and Rahzar into a nearby neighborhood to cause damage. The next day, Freddy sends a message to April that Tokka and Rahzar will be released into Central Park if the Turtles don't meet the Foot Clan at the construction site. Perry develops an antidote to the mutations, but it must be ingested to work. When the Turtles confront the Foot at the site, they try using donuts to trick Tokka and Rahzar into eating the antidote. Tokka and Rahzar soon discover the trick and brutally attack, throwing Raphael into a public dance club where Vanilla Ice is performing. A big fight ensues among hundreds of witnesses. The club owners consider calling the police but see that their customers are enjoying the show. Eventually the Turtles revert Tokka and Rahzar back to their natural state, using a fire extinguisher. Shredder appears in the club, and the Turtles fight with Shredder from the night club to the docks, and Shredder has transformed into a Super Shredder after consuming the last of the ooze. The heavily mutated Super Shredder is too strong for the Turtles to fight but is defeated when he rips the dock apart in his rampage, causing it to collapse onto him.

In a press release, April reads a note from Perry, thanking the Turtles for saving him. When they return home, Splinter orders the four of them to do ten flips as punishment for getting caught by humans (as shown on the newspaper).
Cast
Live action

    Paige Turco as April O'Neil, a news reporter, and the human companion of the Turtles and Splinter.
    David Warner as Professor Jordan Perry, a scientist who works for the TGRI company as head scientist. He works with the Turtles to create an antidote for the mutated Tokka and Rahzar.
    Ernie Reyes Jr. as Keno, a pizza delivery boy, and martial arts expert who meets the turtles in the beginning of the film and befriends them. Reyes was an in-suit performer and stunt double for Donatello in the previous film.
    François Chau as The Shredder, the Turtles and Splinter arch-nemesis who survived the battle with Splinter from the first film, and wishes to get revenge on Splinter and the Turtles. François Chau replaced James Saito in this film.
        Kevin Nash as Super Shredder, a mutated version of Shredder.
    Toshishiro Obata as Tatsu, Shredder's right-hand man and temporary leader of the Foot Clan in Shredder's absence.
    Mark Doerr as Freddy, a Foot Clan member who poses as April's camera operator.
    Michael Pressman as News Manager
    Raymond Serra as police chief Stern from the first film.
    Vanilla Ice as himself

Michael Jai White makes an uncredited cameo as an audience member that joins the Foot Clan with Keno.