The game takes place ten years after the first game, and Rapture is even worse off than it was before. After the events of the first game, there are not enough Little Sisters left to satisfy the Splicers' ADAM addiction, causing them to become even more insane and hostile than before. Andrew Ryan, the creator of Rapture, having been deceased for years, left no one to maintain the city, and no one for the Splicers to listen to. In the state that it is in, Rapture is destined to fall.
Things change, however, following the rise of Sofia Lamb, a former psychiatrist and political rival of Ryan. Lamb is Ryan's opposite in every way and has now taken over Rapture and made dramatic changes. While Ryan believed in the genius of the individual mind, Lamb believes in the collective effort and the power of the community. She is an altruist and her beliefs have corrupted her into forming a cult known as the Rapture Family. This belief spreads through Rapture, causing Splicers to follow her and Father Wales, the deranged priest of her religion. While the Rapture Family spreads a sense of unity and duty to the world, it also serves to further her own secretive personal agenda. The cult also emphasizes use of the butterfly theme, indicating some kind of rebirth of Rapture.
Another mystery explored by the game is that of the Big Sister, who came back to Rapture after being taken to the surface as a Little Sister. Mechanizing herself in a similar fashion to the Big Daddies, she returns to the surface and kidnaps several little girls. She brings them down to Rapture and turns them into Little Sisters, who can now produce ADAM for the increasingly desperate Splicers. As time passes, more Big Sisters appear in Rapture, creating an army, who are now under the employment of Dr. Lamb. Eventually the "original" Big Sister disappears. The remaining Big Sisters are now the main protection of Rapture, and they viciously hunt down anyone who disrupts the balance of power.
In BioShock 2, the player will take on the role of Subject Delta, the first Big Daddy ever created. He has all the abilities, weapons and strengths of a regular Big Daddy while maintaining his sanity and free will. He is awakened from his ten-year-long hibernation by an unknown force, and wonders what has happened to this once beautiful metropolis. He then sets off to search for the one thing that is important to him and that he believes hasn't changed: the Little Sister he bonded with before his hibernation. That is when he comes into conflict with Lamb and the Rapture Family, who are also searching for this little one. Lamb cannot let Delta interfere with her plans and will do anything to stop him from finding this Little Sister. Unlike regular Big Daddies, Delta can also use plasmids. He will be able to combine plasmids, and dual-wield them with weapons at the same time, allowing for powerful combos. He also has the ability to use Gene Tonics.
Delta treads through Rapture, searching for answers and looking for his Little Sister. In an effort to stop Lamb, he teams up with Dr. Brigid Tenenbaum, as she desires to save the Little Sisters, and he also forms an uneasy partnership with Augustus Sinclair, inventor of the Vita-Chamber and former CEO of Sinclair Solutions, a plasmid development company. Although Sinclair seems to mean well, his intentions toward Rapture, and Delta, remain unknown.
The storyline of this game will work with either the "good" or the "bad" ending of the first game. If Jack killed all of the Little Sisters, it is said that Tenenbaum escaped with all the others, with the same effect as if Jack rescued all of the sisters.
There will also be flashback sequences on how Delta came to be a Big Daddy, and why he wasn't present in the events of BioShock.
Choices will have a huge effect in the game, as there will be more than just harvesting or rescuing, and the choices made will have an overall effect of the story.