Prologue: At the Parizska Blood Bank in Prague, Czech Republic, Jared Nomak [Luke Goss] has come to donate blood. As he is being led into the donation room, he is informed that his blood is of a rare phenotype. Bad news for Jared; good news for the blood bank, the phlebotomist says and bares his vampire fangs. Jared laughs hysterically. Suddenly, his chin cracks open revealing a gaping maw with a barbed tongue. He pounces on the phlebotomist's neck, and blood flies everywhere.
Two years have passed since Blade's mentor, Abraham Whistler, shot himself, after being brutally beaten and bitten by vampires. When Blade [Wesley Snipes] learned that the vampires were keeping Whistler alive, he followed their trail through Eastern Europe--first to Moscow, then to Romania, and now to the Czech Republic. When Blade discovers that the vampires are keeping Whistler in stasis in a halfway house, he breaks into the house and rescues him, after killing a number of vampires with silver stakes and bullets made of silver nitrate and garlic extract. One accelerated retrovirus detox shot later, and Whistler [Kris Kristofferson] is back among the living.
Much has happened in the last two years. Blade has taken on a new assistant named Scud [Norman Reedus] who doesn't get along very well with Whistler, now that he's returned. The High Council of Vampires has created a group of six warriors, referred to as the Bloodpack, who are being trained to fight against Blade. However, a vampire virus called the Reaper Strain has mutated in Jared Nomak who passes the virus to everyone he bites. Since the Reaper virus makes carriers extremely voracious, Nomak (and each of his victims) need to feed daily, and they feed on both humans and vampires. The numbers of Reapers, noticeable because they resemble Nosferatu with their bald, blue-veined heads and pointy ears, are increasing exponentially, and the vampires fear the Reapers will first wipe them out then start on humans. Soon... you do the math.
Now that the Reapers are presenting an even bigger threat to the vampires than Blade ever did, Vampire Overlord Eli Damaskinos [Thomas Kretschmann] has sent a message to Blade, requesting a truce and asking him to join with the vampires and actually lead the Bloodpack against the Reapers. Blade agrees, but the Blood Pack--Light Hammer, Verlaine, Priest, Snowman, Chupa, and Reinhardt--are not happy being led by the Day Walker they were training to kill. To assure their cooperation, Blade plants a silver nitrate bomb, courtesy of Scud, on the back of Reinhardt's [Ron Perlman] head. Blade holds the detonator, and it is set to explode should anyone tamper with it.
Accompanied by the vampires Asad [Danny John-Jules] and Nyssa [Leonor Varela], daughter of Overlord Damaskinos, Blade and his Blood Pack begin their search for Nomak by staking out places where vampires congregate, such as blood banks and safe houses, figuring these places will also be attractive to the Reapers. First on the list is the House of Pain, an old hotel converted into a safe house sheltering some 200-300 "suck heads," all dancing and feeding. As the Blood Pack searches the building, Reapers begin emerging from the subbasement. About 1/2 hour before dawn, the Reapers attack. The Blood Pack manages to take out several Reapers with ultraviolet guns, but Nomak gets away, even after being injected with the anticoagulant EDTA, and a Reaper bites Priest, requiring that Priest be destroyed in the rising sun. Lighthammer also gets bitten, but he hides it. In this first battle with the Reapers, Blade learns that Reapers are impervious to silver, EDTA, and garlic, and they rapidly bounce back from almost any wound, including silver stakes thrust into their chests. How in the world can these creatures be stopped, and whose side should Blade be on anyway, considering that both Blade and Nomak are enemies of the vampires?
Meanwhile, back at the High Council, Damaskinos' lawyer, Karel Kounen, has informed Damaskinos of Priest's death and warns the Overlord that he is playing a dangerous game, one that could result in his daughter's death. Damaskinos informs Kounen that his "friend inside" says that everything is going as planned. Friend inside? Who could that be? One of the Blood Pack? Nyssa? Whistler?
Outside the House of Pain, Scud and Whistler, who have been working surveillance from the van and on the roof, have managed to capture a Reaper who was trying to escape down a manhole into the sewers but got stuck. For some odd reason, this Reaper is dying. Blade surmises that the Reaper's body, having gone several hours without feeding, is beginning to feed on itself. Since he is dying anyway, this provides Nyssa with an opportunity to perform an autopsy and learn more about the Reapers. She learns that the barbed tongue contains a nerve toxin to paralyze the victim while the Reaper feeds. Their hearts are encased in bone, making it virtually impossible to shove a stake through them. The only thing that seems to affect them is exposure to sun and to ultraviolet light. Unfortunately, these are also deadly to vampires, which is going to make it difficult for Blade to destroy the Reapers without harming his vampire allies.
Scud spends the rest of the night working to build UV grenades out of phosphor rods. The next morning, meaning to use daytime, the only advantage they have over the Reapers, Blade, Whistler, Nyssa, Asam, and the Blood Pack, armed with UV guns, UV grenades, and large-scale UV bombs go down into the sewers. They split into three units. Whistler goes with Chupa and Reinhardt down the east tunnel. Light Hammer, Verlaine, and Snowman go in the opposite direction, and Blade goes with Asam and Nyssa. Unfortunately, treachery abounds. When Chupa and Reinhardt get Whistler alone, Chupa beats him up. We lose a partner and Blade loses one, Chupa threatens. Light Hammer completes his evolution into a Reaper and feasts on Snowman, then goes after Verlaine, who has no recourse other than to open a manhole cover, killing both herself and Light Hammer in the sunlight.
Then the Reapers start arriving, crawling on the sewer floor, walls, and ceiling. Asam is attacked by a half dozen Reapers crawling underwater. Blade sets off a UV grenade, killing all the Reapers, but it is too late for Asam. Chupa falls prey to Reapers. Reinhardt is being followed by Reapers, so he sets a UV bomb, but the detonator sticks. Blade radios orders to everyone to regroup, but the only ones left standing are Nyssa, Reinhardt, and Blade, so Blade goes back to get the UV bomb that Reinhardt left behind. Only after Blade has found the bomb and is surrounded by dozens of hungry Reapers does Reinhardt radio Blade to inform him that the denotator doesn't work. Holding off Reapers with both hands, Blade kicks at the lever until it finally gives. Ten seconds later, UV light floods the tunnels. It fries the Reapers, but it also hits Nyssa and Reinhardt.
Where is Whistler? Whistler has met up with Nomak who, instead of attacking him, has given Whistler a ring and told him to tell Blade the truth, which Nomak whispers in Whistler's ear.
Meanwhile, Blade has caught up with Nyssa to find her severely burned by the UV bomb and badly in need of blood, so he cuts his wrist and makes her drink his blood. Suddenly, Blade is shot in the back with stun-guns. Kounen and Reinhardt step in. Vampires from the Council round up Whistler, Nyssa, and Blade and deliver them to Damaskinos.
When Nyssa regains consciousness, she is back in her father's study. She tells him how Blade saved her life and asks whether he is still alive. Oh, Blade's alive alright. He, Scud, and Whistler are being held in a chamber deep in Damaskinos' sanctuary. Just as Whistler begins to tell Nomak's "truth" to Blade--that the Reaper virus didn't evolve, it was genetically designed--Damaskinos, Nyssa, and Reinhardt enter the chamber. Damaskinos explains that he has been searching for a way to rid the vampires of their hereditary weaknesses by recombining DNA. As he talks, he shows Blade a cylinder filled with hundreds of small fetal vampires. Nomak was first, Damaskinos says, but Nomak was a failure in that he isn't immune to light. Soon, however, Damaskinos thinks he will have created a new pure race of day-walking vampires, immune to silver and sunlight. All he needs is to figure out why Blade is immune to light and then program that quality into his fetal vampires.
Whistler tosses Nomak's ring at Damaskinos' feet. Nyssa recognizes it immediately as the Damaskinos family crest. Turns out that Nomak is Damaskinos' son, Nyssa's brother! She storms out, followed by her father. Reinhardt takes this chance to beat up on Blade, but Blade pulls out the detonator to the UV bomb on the back of Reinhardt's head. He presses the detonator button, but nothing happens. Scud laughs. I designed the bomb to be a dud, Scud explains as Reinhardt pulls it off his head and tosses it to Scud. Scud then tells Blade how he's been Damaskinos' familiar all along. What do you think of that, Scud asks Blade. Two things, says Blade. One, I've known about you all along and, two, the bomb isn't a dud. Blade then presses a second button. Goodbye, Scud.
Blade is then repeatedly stun-gunned and taken to an operating room where Kounen drives spikes through Blade's body in order to secure him. Kounen explains that he is going to harvest Blade's blood and body parts in order to search for the key to what makes him a Daywalker. However, Whistler manages to get out of his handcuffs, knock out Reinhardt, and escape through the floor ducts to the operating room. He shoots Kounen, and releases Blade. Blade is drained of blood and severely weakened, so Whistler carries him into a bloodbath where Blade quickly regenerates. The first thing Blade does after leaving the bloodbath is to take out two or three dozen guards. Next, he slices Reinhardt in half from head to toe. Then he's off to find Damaskinos while Whistler destroys the fetal vampires.
Meanwhile, Nyssa is having it out with her father. She feels totally betrayed because Damaskinos sent her and her Blood Pack out, expecting them to die. He used both of his children, her and Nomak, for his own purposes, and he used Blade, too. Blade, her supposed enemy, saved her life. As she debates where her loyalties lie, Nomak has succeeded in invading the inner sanctum where Nyssa has sealed herself and Damaskinos. Damaskinos attempts to apologize to his son for all that has befallen him, but Nomak bites his father's neck anyway. As Damaskinos lay dying on the floor, his bluish-green blood spilling out, Nyssa takes off her family ring and tosses it in her father's blood. Nyssa then offers herself to Nomak who dives into her neck, too.
Enter Blade. A drawn out fight ensues between Blade and Nomak until Blade manages to thrust his sword through Nomak's side, the one place where his heart is unprotected by bone. Nomak seems almost happy and, in fact, thrusts the blade in further, and his body disintegrates. Poor Nyssa has been bitten and can already feel her body changing into that of a Reaper. I want to die while I'm still a vampire, she tells Blade. I want to see the sun. Blade carries her outside. Together, they watch the sunrise before Nyssa burns up in Blade's arms.
In the end Blade disposes of Rush, the vampire he had left alive in the beginning of the movie, at the vampires' half-way house.