Young Guns II is a western film about William H. Bonney alias Billy the Kid (Emilio Esteves) and his band of "Regulators" during the Lincoln County War. The movie begins in 1950, some sixty years after the Lincoln County War. An old man named Brushy Bill Roberts meets a lawyer on the side of a desolate road, and says that he is in fact Billy the Kid. The film, which is narrated by the elderly Billy the Kid then flashes back to the 1880s after the gang has dissolved and Billy is now with Arkansas Dave Rudabaugh (Christian Slater) and Pat Garrett (William Peterson).
Billy and Pat are hole up in a Mexican hideaway, and meet up with a kid from an orphan train, Tom O'Folliard (Balthazar Getty). Billy and Pat are chased out of town and take the kid along for the ride. After Josiah Gordon "Doc" Scurlock and Chavez y Chavez (Lou Diamond Phillips) are rescued from hanging, the game reforms. In the meantime, Pat Garrett is offered a huge sum of money and a pardon by Governor Lew Wallace to hunt down Billy and his gang. Billy is captured and again escapes with the help of town madame Jane Greathouse (Jenny Wright).
Billy and the gang ride to another hideout. After Billy reveals that the legendary "Mexican Blackbird" trail was just a ploy to get the gang back together, Doc Scurlock decided to leave. As he exits the cabin, he receives a shotgun blast to the gut. He buys the gang time by arming himself and running into the gunfire. Chavez is also killed. Pat encounters Billy for the last time, and according to Brushy Bill, did not shoot him but let him go. Arkansas Dave makes it to Mexico but is beheaded as a warning to other outlaws. The epilogue states that Brushy Bill went to court, claiming that he was really Billy the Kid but his case was thrown out.