On the island of Amity, sheriff Martin Brody, the hero of previous shark attacks, has died from a heart attack. His wife, Ellen Brody, thinks it was from fear of the shark. She now lives with Sean and his Fiancee Tiffany (Mary Smith). Sean works as a police deputy and is sent to clear a log from a buoy. As he does so, a massive great white shark bursts out of the water, rips off his arm, and then pulls him under the surface and kills him.
Ellen is convinced that the shark targeted Sean on purpose. She decides to go to The Bahamasto spend time with older son Michael, his wife Carla, and their five-year-old daughter Thea. There, Ellen meets carefree airplane pilot Hoagie.
Michael and his friends Jake, William, and Clarence work as marine biologists. One day the enormous shark unexpectedly appears. Michael and Jake decide to keep quiet about the shark's presence because Ellen is trying to convince Michael to get a job on land.
Jake stabs a heartbeat tracking pole into the shark's side. The next day, Michael gets chased by the shark and barely manages to escape unharmed. Thea goes on a banana boat with her friend Margaret and her mom. During Carla's speech about her art work, the shark suddenly attacks, kills Margaret's mother and scares Thea. This time the shark has gone too far, in Ellen's opinion, so she takes Jake's boat and goes after it.
Michael returns home and lets the truth slip about the shark. Michael and Jake are flown by Hoagie to look for Ellen and they find her. Hoagie lands the plane on the water. Michael and Jake swim to the boat and the shark sinks the plane.
Hoagie survives. Jake uses a device to drive the shark mad, then goes to the end of the prow. The shark unexpectedly leaps from the water, pulls Jake under and mauls him. Michael uses a spare bowsprit and causes the shark to leap out of the water. Ellen steers for the shark and Michael stabs it with the broken bowsprit. The shark (somehow) blows up and sinks down to the bottom of the sea with the ship.
Michael then hears Jake, severely injured but alive, floating in the water. They all survive and get back to land. At the end, Hoagie flies Ellen back to Amity Island.