This film follows on from the first Rocky film where his fight with Apollo Creed (Carl Weathers) ended in a draw. Both have suffered serious injuries and are taken by ambulance to Pennsylvania Hospital followed there by reporters. Inside the hospital lobby they meet again but Apollo is enraged because he didn’t have an outright win. Rocky is the first person to go the distance with him and Apollo wants a rematch to prove it was a fluke. However, Rocky has told his girlfriend Adrian (Talia Shire) that he loves her and has quit boxing. On top of this he is told by the doctor that he has a detached retina and needs surgery.
When Rocky leaves hospital after the surgery he proposes to Adrian and they marry quietly. Rocky now has money and goes on a spending spree buying a house, car, clothes for him and Adrian, jewellery and much more. He quit his job working for loan shark Gazzo (Joe Spinell) and persuades him to give it to Adrian’s brother, Paulie (Burt Young). Rocky thinks he’s going to make lots of money making television commercials but, because his reading skills are not good, it is short lived as he rowed with the director on the first one.
Now out of work and unable to get a white collar job because of his lack of education Rocky finds himself back helping at Mickey’s gym. A pregnant Adrian goes back to her old job and Rocky gives his car to Paulie who agrees to keep up the insurance payments.
Apollo is infuriated as he has been getting hate mail; some accusing him of deliberately not boxing his best and others saying that he has no right to call himself a champion as he should have lost the fight. He wants a rematch with Rocky to prove he is rightfully the champion even though his trainer encourages him to let it go and find a new contender. His trainer, Tony “Duke” Evers, tries to convince Apollo that Rocky has too much staying power which is not good for Apollo.
Meanwhile, Rocky, because of his dwindling funds, is reconsidering fighting again and accepts Apollo’s challenge. A first Mickey refuses to train Rocky because of his eye injury but when he sees Apollo making fun of Rocky on television he changes his mind. Mickey trains Rocky, a left-handed fighter, to fight right handed so as to protect his eye. This he thinks will also confuse Apollo if Rocky changes back to the left hand when necessary. He also has Rocky chasing a chicken round a vacant lot; an old training method.
Adrian still opposes Rocky’s return to fighting which affects Rocky’s training performance. Paulie goes and sees the now pregnant Adrian about her attitude to the fighting but she becomes really angry bringing on early labour. Their son is born prematurely and placed in an incubator but Adrian slips into a coma. Rocky will not leave her side other than to go to the chapel with Mickey. He doesn’t want to see his son until he can see him with his wife. Adrian eventually comes out of the coma and gives Rocky her blessing to go through with the fight so the training begins again this time to good effect.
On his training run through the streets of Philadelphia he is cheered by onlookers as he has become a bit of a celebrity. Children follow him like the pied piper and by the end has hundreds chanting his name as he stands on the steps of the Philadelphia Museum of Art arms raised in a victory pose.
The Philadelphia Spectrum is packed to the rafters with Paulie staying at home with the Adrian who is still recovering. And so the fight begins with Apollo knocking Rocky to the floor twice in the first two rounds. This gives him a huge lead but Rocky keeps pounding away.
The 15th and final round. Apollo wants a knock out but his trainer tells him he is way ahead on points so just settle for that. Apollo won’t hear it and becomes more and more frustrated as Rocky keeps coming back. On Mickey’s orders Rocky switches back to left handed boxing which has the desired effect with him landing several punches finally knocking Apollo down. But Rocky is also down both managing to stagger to their feet by the count of ten.
Apollo realises that maybe Rocky is better than he thought and falls back to the canvas while Rocky manages to stay upright and is declared the Heavyweight Champion of the World.