Embedded with quirky comedy and extraordinary fantasy, this action thriller sparks off when the wedding of Will Turner and Elizabeth Swann is crashed by Lord Cutler Beckett of the East India Trading Company, who has arrest warrants for the couple along with Commodore James Norrington, for allowing Captain Jack Sparrow to escape custody. Norrington's whereabouts are uncertain, as he resigned after his obsessive pursuit of Sparrow resulted in the Navy's flagship, HMS Dauntless, being destroyed in a typhoon.
Elizabeth is imprisoned, but Beckett promises to free her if Will tracks down Jack and brings him his magic compass which points to whatever the holder wants most. Shortly after, Governor Swann tries to escape Port Royal with Elizabeth but is captured. Elizabeth negotiates with Beckett to let her escape to find the compass herself and she hides aboard a Scottish merchant vessel, the Edinburgh Trader.
On the Black Pearl, Jack reunites with Will’s father Bootstrap Bill, who reveals he is a crewman on the Flying Dutchman, captained by Davy Jones, who Jack previously made a deal with to raise the Pearl from the depths. Jack must join Jones’ crew or be dragged to his Locker by the monstrous Kraken. Jack flees to land, Will finding the crew on an island ruled by cannibals, though they escape. The crew meet voodoo priestess Tia Dalma, who tells them Jones’ weakness is his heart, locked within the Dead Man’s Chest.
Locating the Dutchman, Will is shanghaied into service while Jones sends Jack to bring him one-hundred souls so his debt can be paid. On the Dutchman, Will meets his father, and learns the chest’s key is in Jones’ possession. After playing a game of Liar's Dice against Davy Jones, Bootstrap helps Will escape with the key, but Jones sends the Kraken after him, sinking the Edinburgh Trader in the process.
In Tortuga, Jack hires a new crew, including Elizabeth, and a drunken Norrington. All parties arrive on Isla Cruces where the chest is buried but a three-way sword fight break out between Jack, Will, and Norrington who all want the heart for their respective goals – Jack wants to call off the Kraken, Will wants to rescue his father, and Norrington wants to regain his life. In the chaos, Jack obtains Jones’ heart and hides it in a jar of dirt, but Norrington secretly steals the heart and runs off pretending to lure away the Dutchman’s crew.
Jones attacks the Pearl with the Kraken, which devours most of the crew and destroys all but one of the Pearl's lifeboats , but Jack, who briefly fled, returns and wounds it with a net full of explosives.
Jack orders the survivors to abandon ship, but is chained to the mast by Elizabeth so the crew can escape the Kraken. Jack manages to break free but is dragged down to Davy Jones’ Locker. Jones discovers his heart is missing and rages. In Port Royal, Norrington approaches Beckett and gives him the heart and Letters of Marque meant for Jack, allowing him back into the navy as well as allowing Beckett to gain control of Davy Jones.
The Pearl’s crew take shelter with Tia Dalma, but all agree to rescue Jack from the Locker. Tia Dalma comments they will need a captain to guide them: The resurrected Captain Barbossa. In the post credits scene, the Mongrel dog that was set ashore along with Pintel and Ragetti is depicted as the next god of the cannibals of the island, yet to be eaten.