God of War II takes place some time after the events of the first game; Kratos, after his defeat of Ares, takes over as the God of War in Olympus, but he is despised by the other Gods due to his dark past and deeds (also because he successfully murdered a God). Kratos finds enjoyment the only way he can, and turns to his army, the Spartans, and aids them as they conquer Greece. Athena tries to stop Kratos from this rampage, but he ignores her, and he himself goes to Rhodes to aid his army; however, as soon as he arrives, an eagle swoops in and steals some of his godly powers and brings to life the Colossus of Rhodes to fight against Kratos. Kratos initially suspects Athena of these actions as he fights the living statue across the city. As Kratos (weakened from the loss of some of his divine power) begins to wear down, Zeus offers him the Blade of Olympus to finish the battle, all Kratos need do is drain his power into the blade and he will have more than enough power to destroy the Colossus. Kratos accepts, and manages to bring down the Colossus at a tremendous cost to his body. After defeating the colossus, Kratos is smashed by its falling hand. Fallen, exhausted and suffering severe internal injuries, Kratos can only watch as the eagle swoops down again, and reveals itself to be Zeus, who tricked Kratos into putting his power into the Blade of Olympus, rendering Kratos a mortal, and stripping him of all his godly powers. Zeus demands that Kratos swear allegiance to him, but Kratos soundly refuses to be subservient to the Lord of Olympus. Zeus then uses the Blade to kill Kratos, who is too weak from his battle with the Colossus and loss of his godhood to put up any real resistance.
However, as Kratos is being dragged into torment in the Underworld he is saved by Gaia, one of the Titans, who has observed his life up to this point and offers to save his life and help restore his powers so that Kratos can help the Titans exact revenge on the Gods for the punishment they suffered when they lost the war between the Gods and the Titans. As Kratos escapes the Underworld, Gaia tells him that he must find the Sisters of Fate in order to change his past, and gives Kratos the help of Pegasus to transverse the distance to the Fates. Kratos and Pegasus fly to the Island of Creation where the Sisters of Fate await, well guarded in both the air and on land.
Along these travels, Kratos encounters, and in many cases, defeats several heroes and monsters, gaining new powers, weapons, and magical abilities that he lost to Zeus' trap. He finally encounters the Sisters, Lakhesis, Atropos, and Clotho, all three that aggressively defend the Loom that can change the lives of mortal and God alike. They even attempt to change Kratos' past by changing the outcome of the final battle he had with Ares. Nevertheless, Kratos is able to defeat each Sister, and gains control of the Loom. He first tries to go back to the point where Zeus kills him in Rhodes, leading to a lengthy battle with the King of all Gods. Kratos manages to trick Zeus, wrestling the Blade of Olympus from the God and is about to impale him when Athena appears and takes the fatal blow instead. In her dying words, she reveals that Zeus' actions are meant to break the cycle in Olympus of son killing father and, in turn, reveals to Kratos that he is the son of Zeus. As Athena dies, Kratos vows to exact retribution on the Gods of Olympus for their acts of self-preservation above all else.
Returning to the Loom, Kratos uses it once again to go back further in time, right between the end of the war between the Gods and Titans, and offers the Titans the chance to come back in time with him (possibly why the gods won the war) to finish their war with Olympus with Zeus weakened and the other Gods in a state of confusion. The game ends with the Gods of Olympus, in the present, watching in horror as the Titans climb up Mount Olympus, led by Kratos shouting "Zeus! Your son has returned! I bring the destruction of Olympus!"