Forbidden Siren 2 is the second installment in the Siren series.

The game tells the story of several characters who become trapped on Yamijima Island, an island off the coast of mainland Japan. On August 3, 1976, an underwater cable was cut, and all power to the island was lost. During the subsequent blackout, all of the islanders disappeared and the island became deserted. Twenty-nine years later, in 2005, a magazine editor called Mamoru Itsuki is visiting the island to conduct research for an article when the ferry he and a small group of other passengers are on capsizes, after it is hit by a red tidal wave. Shortly after his arrival, a group of soldiers crash land on the island after their helicopter has engine troubles. They must all find ways to survive the island's "monsters", the shibito.

The game is played through several character perspectives, each with his or her own strengths and weaknesses, through an overlapping timeline of the fateful night that alternates between the present and the past. The story can unfold in different ways with, in many cases, two or more different versions of a level, which will have slightly different objectives than the original. If the player is thorough and plays through these optional versions, the story and characters may develop even further than before

Millennia ago, Mother was an ancient water deity who was imprisoned below the earth upon the creation of light. Mother's mate, Otoshigo, fled to the depths of the ocean. Over time, Mother has been determined to return to the surface, and has sent out avatars (possessed human beings whom she controls) to prepare for her return. However, they continually fail their mission, and never return to the Underworld.

In 1976, an underwater cable was cut, and all power to Yamijima Island was lost. Four-year-old Shu Mikami finds a young woman washed up on the shore. The woman, Kanae, bears an extraordinary resemblance to Shu's dead mother. The two become inseparable and Kanae moves in with Shu and his father. The Yamijima locals fear her because of her aversion to sunlight. Kanae is actually an avatar of Mother, tasked with manipulating Shu into opening the seven gates of the Underworld, which are located on Yamijima Island, and keep Mother imprisoned. Before Kanae can complete her mission, Tsuneo Ohta, the head of a group of fishermen, determines she must be killed.