Plot

The Bakers find themselves competing with a rival family of eight children while on vacation.

Two years after the events in the first film, football coach Tom and author Kate Baker plan a vacation for the whole family. However, instead of having a peaceful summer vacation at a picturesque lakeside resort, they embark on an outrageous competition with Tom's long-time rival, obnoxious Jimmy Murtaugh, and his overzealous clan. Let the games begin. But who will win? Will the two fathers ever bury the hatchet and become friends?—Nick Riganas

The Baker Family is headed by Tom and his wife Kate (Bonnie Hunt). Their kids include Nora, Charlie (Tom Welling) mechanic, Lorraine (Hilary Duff), Henry (Kevin G. Schmidt), Sarah (Alyson Stoner), Jake (Jacob Smith), Mark (Forrest Landis), fraternal twins Jessica (Liliana Mumy) & Kim (Morgan York), Mike (Blake Woodruff) and twins Nigel (Blake Woodruff) & Kyle (Shane Kinsman). The Baker family lives in Chicago.

The Baker family begins to undergo many changes, beginning with Lorraine's high school graduation and internship with Allure magazine in New York City. Their oldest daughter Nora (Piper Perabo) is now married to Bud McNulty (Jonathan Bennett) and pregnant, but the couple intend to move to Houston because of Bud's new job promotion as Vice President of an advertising firm. After the party thrown in honor of Lorraine's graduation, Tom wants the family to play touch football, as they always do. But all the kids had things to do and places to go.

Feeling that the family is breaking apart as the children grow up and move away, Tom (Steve Martin) persuades the entire family to take one last family vacation all together at Lake Winnetka. The family finds that their old cabin is owned by a man named Mike Romanow (Peter Keleghan).

Tom's old rival Jimmy Murtaugh (Eugene Levy) and his large family (with "only" eight kids) are also there for the summer, who owns a new property right across the lake, which looks a lot more fun. Mike is Jimmy's neighbor at the lake and friend who is the owner of the old cabin at Lake Winnetka that the Baker family rents. Jimmy plans to purchase the Mike property and make the whole lake exclusive to himself. Mike invites Tom and his family to the local club, which has been recently renovated and is open only to homeowners.

Murtaugh family includes Jimmy, his wife Sarina (Carmen Electra), Calvin (Shawn Roberts) who studies at Yale, Anne (Jaime King), Daniel (Robbie Amell), Becky (Melanie Tonello), Elliot (Taylor Lautner), twins Lisa (Courtney Fitzpatrick) & Robin (Madison Fitzpatrick) and Kenneth (Alexander Conti). Jimmy and Sarina have been married for only 6 months and Sarina looks to be a trophy wife. Jimmy cannot remember Kate's name, despite her reminding him multiple times.

Jimmy constantly flaunts his wealth and success to Tom, as well of the accomplishments of his children, often suggesting to Tom that the Baker children are less successful because of Tom's parenting style. Jimmy says that Tom's 12 never beat his 8 at the Annual Family Cup.

Tom is also distraught that none of kids want to participate in the family activities that he has lined up and would rather spend time at Jimmy's house playing video games or using their internet. Tom goes to the hardware store to pick supplies and fix up the old cabin, which had several maintenance issues. Tom sets up a campfire and tents outside the cabin, but no matter what he does, the kids believe that Jimmy's place is a lot more fun.

The Baker kids get into many accidents. Such as when Mark Baker (Forrest Landis), along with Kenny Murtaugh, crash into a tennis court with a golf cart and ruin the court, Sarah Baker (Alyson Stoner) stealing merchandise from a gift shop, and Mark Baker accidentally setting a backpack of fireworks on fire at the country club, causing widespread panic, especially when the backpack of fireworks is thrown into a boat, igniting the boat's engine and causing it to explode. Mark is given the duty of carrying out garbage for a month.

Jimmy again brings up the topic that Tom needs to be stricter with his kids. This angers Tom, and he and Jimmy decide to settle the matter at the Annual Labor Day Family Cup. Tom trains the kids for days, not realizing that they are miserable. Soon Sarah and Elliot Murtaugh (Taylor Lautner) go on a date at a Movie theater watching Ice Age, where they are spied on by their fathers, leading an argument between the two and humiliating their children. Sarah is furious and refuses compete for her father in the "stupid cup!" while Elliott rebels against his father and continues to spend time with Sarah.

The other children are also angry with him for spying on Sarah and ruining the entire trip because of his competitiveness with the Murtaughs. Kate laments that his and Jimmy's conflicting parenting styles have torn the two families apart. Tom goes to the Annual Family Games to compete for the cup with Nigel and Kyle (the only two who are willing to go while the others abandon Tom). Kate and the rest of the family soon show up, showing that they forgive Tom and are willing to compete for the cup. After the events, however, the Bakers and the Murtaughs are tied for first; a tie-breaking canoe race is announced, in which every family member must compete.

During the canoe race, Nora goes into labor. The Murtaughs want to help, but Jimmy, sensing the opportunity to defeat Tom once and for all, refuses. The Murtaugh children jump out of the canoe to help the Bakers. While arguing with Sarina, Jimmy reveals that he was jealous of Tom being the popular one when they were younger. Eventually, Sarina convinces him to help, and the two families work together to get Nora to the hospital. Bud, Lorraine, who is the baby's godmother, and Kate go with Nora to the delivery room, while Tom, Jimmy, Sarina, and the rest of the kids stay in the waiting room.

While talking with Jimmy, Tom realizes that he has to let his kids grow, but wherever they go, they will always be together as a family. Nora then gives birth to a baby boy whom she and Bud named after his maternal grandfather Tom, who has shown them that "there is no way to be a perfect parent, but a million ways to be a really good one."

Bud announces that he and Nora have bought the cabin back at the lake. Nora, Bud, and baby Tom leave for Houston a few days later, and the family enjoys the rest of their vacation.