From former Night Guard of the American Museum of Natural History, Larry has now become the owner of a direct response television company. His business primarily deals with selling unique or innovative inventions. He hears about the exhibits from the museum being transferred to the Federal Archives of the Smothsonian Museum, including the Egyptian Tablet exhibit which was primarily responsible for infusing life into all the exhibits in the first part.
But all hell breaks loose when Dexter the Monkey steals the tablet and takes it to the Smothsonian Center. Now it is up to Larry to resolve the impending mayhem. So he takes his son Nick along, and poses as the Night Guard to gain entry into the Museum. Amidst a lot of confusion and chaos, it is discovered that it is the evil Kahmunrah who is responsible for stealing the tablet. He has been harboring villainous intentions all along, and will soon misuse the Ancient Tablet of Akmenrah to resurrect the dead, gain immortality and conquer the world. While Larry and his son are on a quest to stop this destruction from happening, a number of clues, puzzles and riddles await him. He needs the help of Amelia the expert to solve them, and they end up eventually falling in love.
A fleet of exhibits like Albert Einstein, Abraham Lincoln and Napoleon come to life, adding value, excitement and intrigue to the story. Finally, the use of the Wright Flyer is made to rush to the spot of destruction. Before the Tablet can be misused, Larry successfully banishes Kahmunrah to the Underworld and is aided in an exciting climax with the help of bird-headed warriors. All is well in the end, when Larry decides to sell his business, for obtaining money to restore the museum, and he and Amelia live happily ever after!