After being impaled by a pipe and plunged into a body of water, the now-undead “Maniac Cop” Matthew Cordell acquires a junked police cruiser and restarts his killing spree through New York City. Finding a convenience store in the middle of a robbery, he kills the clerk; the thief is subsequently killed in a shootout with police. As Cordell stalks the streets, his enemies Officers Jack Forrest and Theresa Mallory are put back on duty by Deputy Commissioner Edward Doyle, who has the two undergo a psychiatric evaluation under Officer Susan Riley. While Jack is content that Cordell is dead, Theresa is convinced that Cordell is still alive and plotting his revenge.
At a newsstand, Jack is fatally stabbed by Cordell. In order to protect the memory of Commissioner Pike, the corrupt official who originally framed Cordell, the police refuse to inform the public of the nature of recent events. This, along with her belief that Cordell is alive and killing, prompts Theresa to appear on a talk show to inform the public about Cordell. A traffic cop is murdered by Cordell later while attempting to tow a man’s car. The man who was having his car towed is arrested on suspicion of the cop’s murder.
While en route to a hotel in a taxi, Theresa is joined by Susan, and the two are attacked by Cordell, who kills the cabbie and forces Susan and Theresa off the road. After handcuffing Susan to the steering wheel of a car and sending her into the busy streets, Cordell kills Theresa by snapping her neck. Gaining control of the car, Susan crashes and is found by authorities.
Elsewhere, a stripper named Cheryl is attacked in her apartment by Steven Turkell, who has strangled at least six other exotic dancers. Cordell arrives, murders two officers whom Cheryl called for, and helps Turkell escape. Turkell befriends Cordell and takes him back to his apartment, where Cordell stays for a short while. After Cordell leaves, Turkell visits a strip club, where he is identified by Cheryl to Susan and Detective Lieutenant Sean McKinney. He is arrested and placed in a holding cell.
Cordell breaks into the police precinct, murders nineteen police officers, and frees Turkell and several unnamed convicts. Using Susan as a hostage, Turkell, Cordell, and another criminal named Joseph Blum hijack a prison bus and head to Sing Sing, where Turkell believes Cordell wants to free all inmates and create an army of criminals. McKinney and Doyle follow, and McKinney convinces Doyle to reopen Cordell’s case and rebury his casket with full honors on the assumption that this will appease Cordell.
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Some time later, Cordell is buried with full honors alongside 19 other deceased officers he murdered; Susan and McKinney attend his funeral. As Cordell’s casket is lowered, McKinney throws Cordell’s badge into the grave, leaves with Susan, and monologues about how justice and pressure are the only differences between a cop and a “Maniac Cop”. Then the camera slowly and eerily zooms in on Cordell’s gravesite. After a few seconds, Cordell’s hand unexpectedly bursts through the lid of his casket (in a jump scare) and quickly grabs his badge as the screen cuts to black and the credits roll.
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