After
the events of the previous game, the Prince and Kaileena return to
Babylon. As the Prince's vessel nears the shores of the city, he
removes the medallion from his chestplate and drops it into the sea.
Upon returning to Babylon, he is horrified to find that the city is
currently being ravaged by war. His ship is attacked and he and
Kaileena are thrown overboard, with Kaileena taken prisoner after
drifting ashore. He then tries to rescue Kaileena, but ultimately,
finds The Vizier still alive, and once he finds him, The Vizier kills
Kaileena with the Dagger of Time, which contains The Sands of Time now,
and after this, The Vizier impales himself with the Dagger, making him
immortal. The Prince also gets affected, having a weapon known as a
Daggertail embedded in his skin, with the Sands infecting the wound.

As the Prince travels through the city once again to kill the Vizier, he realizes that by taking Kaileena from the Island
of Time, the events of The Sands of Time never happened, thus, he never
killed the Vizier. He also finds that the Sands of Time have affected
his mind. He has essentially been split into two personalities: one
which, for the most part, strives to do good, although is fueled by
vengeance, and the Dark Prince, manifested by an internal voice that
speaks to the Prince. The Dark Prince is a cruel and arrogant being,
who throughout the game, attempts to convince the Prince that they are
the same person, and that the Prince should strive to serve only
himself, using the Prince's vengeance as a catalyst for his other
emotions. While searching for the Vizier, the Prince encounters Farah,
who does not remember him, and is surprised that the Prince knows her
name. As the game progresses, the Prince learns more about the nature
of the Dark Prince, who is in fact, not a part of the Prince, just the
manifestation of the Sands of Time trying to overcome his body and
mind. The Prince eventually starts to ignore the Dark Prince, being
inspired by Farah to be fueled by compassion for his people who are
suffering, rather than be fueled by vengeance for the Vizier.

When the Prince finally finds the
Vizier, he casts the Prince into a dried well, where the indwelling
Dark Prince tries more aggressively to take control. The Prince
eventually finds the dead body of his father, who he had hoped to
reconcile with, and is forced to face his wrong actions. By accepting
the consequences of what he has done, he silences the Dark Prince,
seemingly in permanence. The Prince escapes the well, and once again
confronts the Vizier, who is killed by being stabbed with the Dagger of
Time. Kaileena appears to the Prince and cleanses him of his infection
by the Sands of Time, and all his wounds. As the Prince leans down to
reach for his father's crown, he is confronted by the Dark Prince, who
draws the Prince into his mind, where the two struggle for control,
ending with the Dark Prince ultimately silenced. The Prince then
awakens in Farah's embrace. Farah then asks the Prince how he really
knew her name. He replies,