After the decline in Atlantean culture following the sinking, Kida (Kidagakash), now Queen, and married to Milo Thatch, now a king, was using the heart of Atlantis to restore her city's former glory. Though the evil Rourke is gone, more dangers would be under way, during the upcoming missions. Milo's comrades and Mr. Whitmore arrived in Atlantis; while their arrival was unexpected the Atlanteans welcomed their old friends. Unfortunately, they had come to inform them of mysterious forces causing trouble on the surface. At first they presumed it to be an ancient Atlantean defense mechanism gone rogue (like the Leviathan from the previous film, although it remained loyal). But when they arrived at Norway, they discovered it was actually a creature known as the Krakken, which had been attacking ships and taking their cargo to a cliffside village, which was devoid of spirits. They later discovered that the town leader, Edgar Vulgud, seemed to be controlling the Krakken, but soon learned that the Kraken itself was the master, having made a deal with Vulgud. When they blew up the Krakken, Vulgud disintegrated, restoring the spirit of the village. Milo said it's up to people like Inger to raise their little ones in peace. (A deleted scene shows that Inger's child had Kraken tentacles, implying it's not over.)
All the while, Kida was learning about the outside world and is adapting well. However, she still felt guilty, as there could still be other Atlantean war machines in the world causing problems, like the Leviathan. Their next mystery was in the Southwest, involving coyote spirits opposing them. They later found a hidden city in Arizona contains a statue that greatly resembles Atlantean architecture. Unfortunately, a very sly shop owner, Ashtin Carnaby, intended to pillage the place for its valuables, but the spirits then turn him into one of them. Chakashi, a Native-American man, who was a median between the spirits, trusted them with the knowledge of their sanctuary and informed Kida that she can choose Atlantis' destiny.
The third mystery that needed to be solved was from Whitmore's cabinet. An old competitor Erik Hellstrom stole a possession of his (having lost his mind following the stock market crash ruining his company; Hellstrom thinks he's Odin), an artifact called the Spear of Destiny (aka Odin's spear, Gungnir), presumably an Atlantean artifact of origin. When they tracked him down in the frigid Nordic Mountains, he presumed Kida to be his "long lost daughter" and kidnapped her. His intentions were to end the world in Ragnarok. He created a lava (the Fire demon Surtr (or Surtur)) and ice beast (a Nordic Frost Giant) to destroy the world, but well-placed explosives used by Vinnie annihilated the monsters (By causing each beast to believe they were trying to destroy each other). During these escapades, Kida came into a greater understanding of just how powerful the Atlantean Crystal is, and she must choose between hiding it and sharing it with the rest of mankind.
Having retrieved the spear, Kida realized her father was wrong to hide the Crystal from mankind. She combined the Spear with the Heart Crystal and lifted Atlantis to the surface. Two fishermen were shocked when they suddenly see an entire continent rise before them. In the end, we see Atlantis above the water for the first time in over 9000 years.
As the movie came to an end, Mr. Whitmore narrated that from then on, the world was a better place.
- James Arnold Taylor as Milo Thatch
- Cree Summer as Kida Nedakh
- Corey Burton as Gaetan Moliére
- John Mahoney as Preston B. Whitmore
- Phil Morris as Joshua Sweet
- Don Novello as Vincenzo Santorini
- Jacqueline Obradors as Audrey Ramirez
- Florence Stanley as Wilhelmina Packard
- Steve Barr as Jebidiah Allardyce "Cookie" Farnsworth
- Floyd Red Crow Westerman as Chakashi
- Clancy Brown as Edgar Vulgud
- Thomas F. Wilson as Ashtin Carnaby
- William Morgan Sheppard as Erik Hellstrom
- Frank Welker as Obby