Inspector Gadget 2 picks up after a time of unusual peace in the city of Riverton: crimes have dropped dramatically since Dr. Claw’s arrest, and Inspector Gadget—along with his Gadgetmobile and faithful dog Brain—are basically twiddling their gadgets. Gadget suffers from glitches: his catchphrase “Go‑go gadget …” often summons the wrong gadget, or malfunctions in comical ways. He overreacts to trivial infractions, such as issuing jail time for minor traffic violations, which draws the ire of Chief Quimby.

Things go downhill when Gadget, in one misadventure, arrests Quimby’s mother for driving just barely above the speed limit with no license. Though technically a minor issue, it’s enough to get Gadget placed on probation. Meanwhile, Dr. Claw escapes from prison under the cover of a storm, intent on revenge and resuming his criminal empire. Riverton’s authorities respond by unveiling a new, upgraded, female robot agent known as “G2” (Gadget Model #2) who is meant to replace—or at least supplement—Gadget in his role. Gadget, despite his flaws, develops feelings for G2; she, however, prefers to work solo and views Gadget as more of a nuisance than a partner.

Dr. Claw’s plans ramp up quickly: he hires new henchmen (Brick, McKibble, and others like Squint, Jungle Bob, and The Ninja), and starts stealing pieces needed for a huge crime. Among these items are ionic fuel cells, a protoid laser, and a ruby on loan for a fancy fundraiser. Gadget tries to stop the thefts but his glitches and clumsiness constantly spoil his efforts—often allowing Claw’s minions to steal parts right under his nose and prevent G2 from stepping in.

At a crucial science convention, Claw’s minions trick Gadget: they install a circuit override chip in his hat, allowing Claw to control him—and unleash chaos. Gadget takes the blame and is fired (though many characters feel it wasn’t entirely his fault). Gadget, down but not out, refuses to give up. His niece Penny, always eager to help despite her uncle’s reluctance to involve her, begins her own investigation with Brain. Together they uncover clues leading to Claw’s secret hideout in an abandoned factory.

In the finale, Claw activates a doomsday device—a laser that can freeze time in Riverton, allowing him to loot the Federal Reserve without resistance. Gadget and G2 team up, switching some internal circuitry so that Gadget operates more reliably. After a chase and rescue of Penny, and a confrontation on a bridge, Gadget manages to trap Claw’s goons in a bubble‑gum puddle and stops the time‑freezing laser. Claw escapes via a rocket‑like pod, vowing revenge. Riverton returns to normal, Gadget is reinstated, Penny is awarded for her bravery, and Gadget and G2 share a romantic moment—complete with fireworks from Gadget’s hat.

Overall, Inspector Gadget 2 mixes slapstick humor, gadget mishaps, and a familiar battle of good vs evil. It emphasizes themes of perseverance despite flaws, family teamwork (especially Penny’s resourcefulness), and redemption. Even when his gadgets fail him, Gadget’s heart—and willingness to do the right thing—ultimately saves the day.