The Godfather 2 shuttles back and forth constantly from past and present, contrasting the life of Vito Corleone in the early twentieth century, from his humble beginnings through his ascent into power, with that of his son Michael Corleone in the second half of the twentieth century, whose influence is declining. The film begins with a flashback to 1901, where the grisly massacre of the Andolini family in Corleone, Sicily is well underway. A nine-year-old Vito Andolini is spared from the bloody vendetta against his family enacted by local Mafia head Don Ciccio by the quick actions of loyal Andolini clan retainers. Vito makes his way to Ellis Island in New York where a migration officer registers him as “Vito Corleone” after finding the name “Andolini” too difficult to pronounce and spell.
Fast forward to 1958: current Corleone Clan Don Michael Corleone is celebrating his son’s First Communion party at Lake Tahoe. Amidst this joyous occasion, he is holding a series of meetings as the head of his organized crime family. There is dissidence within his organization; his caporegime, Frank Pentangeli, is disappointed. He feels that Michael has abandoned him, failing to defend his territory from incursions of the Rosato brothers, who work for Hyman Roth, who in turn works for Michael. In the evening an assassination attempt is carried out in the Corleone compound with Michael as the intended target. Michael is able to escape the attempt on his life, and to get to the bottom of the assassination he flies off to Nevada to gather his forces and to do some intelligence work.
The scene changes quickly and a flashback is shown once again, this time to a grown Vito Corleone, living in New York in 1917 with his wife Carmela and a very young Santino. A stoic Vito Corleone has just lost his job due to patronage politics of local extortionist Don Fabrizio Fanucci; and in a strange twist of fate, he happens to witness a burglary being perpetrated by his would-be enforcer, Peter Clemenza, who asks that he remain quiet about the crime. Vito obliges, and when Celemenza sees that Vito is a man who can keep his mouth shut regarding criminal ventures, he invites him to take part in a burglary.
Again, the scene jumps forward once more to the “present,” where Michael guesses that Roth is the mastermind of the murder attempt. Rather than confront him, Michael continues with his ventures with Roth, pretending that he doesn’t suspect a thing. He does this in order to root out all co-conspirators in the treachery against the Corleone clan. As part of his plan he sends Pentangeli to make peace with the Rosato clan in order to preserve the semblance of ignorance. This doesn’t go as planned, though, as they try to kill him. Michael continues to feign ignorance and goes on with business as usual; the Corleone group and their partners, including Hyman Roth and Michael, fly to Havana, Cuba to discuss the direction of their business forecasts under the accommodating administration of Fulgencio Batista. Michael, however, expresses his hesitation after contemplating the effects of ongoing Cuban Revolution.
Come New Year’s Eve, Michael moves to have Roth and Johnny Ola, Roth’s second in command, eliminated. Roth survives because the Cuban police shot the would-be assassin, thinking that he was a rebel. Michael soon discovers that the traitor who leaked critical information to his enemies was none other than Fredo—his older brother. The Corleone group ends their business dealings in Cuba because of Batista’s resignation due to pressure exerted by the rebels and the increasing instability of the political scene. Michael, Roth, and Fredo all capitalize on the confusion to make their escape, individually, to the US. Upon Michael’s return, he greeted with more bad news: his wife Kay has suffered a miscarriage.
Once more the scene shifts to a flashback, again focusing on Vito Corleone, this time a little older with two more children in tow, Fredo and Michael. Vito’s illegal activities have caught the attention of Don Fanucci, the local small-time Mafiosi who runs protections rackets in the neighborhood. He proposes to take a portion of Vito’s earnings from his criminal ventures in exchange for his safety. Clemenza and Salvatore Tessio, Vito’s partners in crime, suggest that they pay in full to avoid earning Fanucci’s ire. Vito refuses, insisting that he can persuade Fanucci to take a smaller tribute by making him “an offer he can’t refuse.” He pays a visit to Fanucci showing equal parts deference and bravado, successfully fooling him into thinking that he is a docile man who fears him, lulling Fanucci into a false sense of security. Later on, during the neighborhood festival, Vito follows him to his apartment where he shoots him using the sound of fireworks to conceal the crime.
The film jumps forward again to a courtroom scene where a Senate committee is investigating the Corleone family for alleged involvements in organized crime. Pentangeli believes that Michael has betrayed him, because of the unsuccessful assassination attempt on his life. He agrees to testify against Michael in exchange for being placed under the witness protection program. Meanwhile, Fredo returns to Nevada, seeking a private audience with Michael in an attempt to clear his name and spare his life. He explains that he was indignant at being bypassed by Michael for leadership of the clan, and thus agreed to assist Roth in organizing a coup—unaware that this involved a plot to kill his brother. After Fredo confesses, Michael promptly disowns him.
Trying to protect himself from the investigation, Michael resorts to another method to shake Pentangeli, who is now virtually untouchable because of the federal witness protection program. He has his men bring Pentangeli’s brother to the court proceedings, and it is clear that although Pentangeli himself is safe, Michael would ensure that his entire clan would be wiped out if he doesn’t recant. Pentangeli denies all his previous statements and a riot breaks out in the courtroom. Just when it seems that matters are turning out favorably for Michael, Kay decides to reveal the truth regarding the supposed miscarriage. It was actually an abortion, and to add fuel to the fire she intended to run off with their children in tow, reasoning that she didn’t want them to take part in the clan’s criminal empire. A now-livid Michael Corleone then banishes Kay and takes sole custody of their children.
The scene then cuts back to another flashback: here we see Vito Corleone visiting Sicily, the first time since his harried departure many, many years ago. He visits the compound of Don Ciccio with his business partner Tommasino under the pretense of paying their respects to him to seek his blessing to set up their olive oil import-export business. Vito is there however to exact vengeance on the old Don for wiping out his clan. He approaches the aged Don Ciccio to personally give him a gift—a liter of his finest olive oil. When the old Don asks him who he is he introduces himself as “Vito Andolini.” He then proceeds to stab Don Ciccio with a concealed knife, dragging the blade through his midsection slowly ensuring that the Don dies slowly and painfully. They manage to escape, but Tommasino is wounded in the leg causing him to limp for the rest of his life.
Jump forward in time to the Corleone Family at a funeral. Carmela Corleone, the clan matriarch, has died. Out of respect for his mother, Michael had refused to carry out any reprisals against Fredo. Now that Mamma Corleone has passed away, Fredo must finally pay for his betrayal, and Al Neri, the Corleone caporegime, is tasked with killing Fredo out on the lake. Word gets out that Fredo has been eliminated, and the Corleone coup plotters scramble to escape: Roth is denied entry to Israel and must return to the US; he is eventually shot by Corleone enforcer, Rocco Lampone, who is in turn shot by federal agents shortly afterwards. Pentangeli is visited by Tom Hagen, the Corleone clan consigliere, in the witness protection safehouse. He obliquely threatens Pentangeli’s family by reminding him that the Roman conspirators of old who failed in their coup attempts committed suicide. Pentangeli agrees in exchange for the promise of his family’s safety and care in his absence. Hagen agrees, and Pentangeli slits his wrists in the bathtub later on.
The film ends with a final juxtaposition of scenes. Flashback to 1941: it is Don Vito’s birthday, and his family members have gathered to surprise the clan patriarch, but his youngest son, Michael, has an even bigger surprise in store for the family: he is enlisting in the US Marine Corps to fight in the Pacific War efforts, and he decides to make that announcement today. Santino responds with his usual fire and brimstone, Tom is completely doubtful of what he hears, and Fredo is the lone supportive voice in the cacophony. While they argue over the announcement, they hear Don Vito arrive. Everyone leaves to greet the Don, save for Michael, who sits alone, contemplating how to break the news to his father. The film ends with the last jump forward to a much older Michael Corleone, this time sitting alone by the artificial lake at the Corleone Compound.