During John Kramer's (Tobin Bell) autopsy, a wax-coated microcassette is found in his stomach; it is given to Detective Hoffman (Costas Mandylor), whom it informs that he too will be tested, and that the games will continue. Meanwhile, Trevor (Kevin Rushton) and Art (Justin Louis) awaken in a mausoleum. Both men are chained at the neck to a winch; Trevor's eyelids are sewn together, as is Art's mouth, rendering communication impossible. When the winch begins pulling them together, Trevor panics and attacks Art, who kills him and takes a key from his collar to free himself, tearing his lips in the process.
Four days after her disappearance, the corpse of Detective Kerry (Dina Meyer) is found by the police. After Hoffman cautions Lieutenant Rigg (Lyriq Bent) for going through an unsecured door in order to reach Kerry, he meets Peter Strahm (Scott Patterson) and Lindsey Perez (Athena Karkanis), two FBI agents who had previously been in contact with Kerry. They inform Hoffman that neither Jigsaw nor Amanda Young (Shawnee Smith) murdered Kerry, as neither were physically capable of placing her in the trap, indicating there is a third party involved. Strahm later becomes suspicious of Rigg, who is convinced that Eric Matthews (Donnie Wahlberg), who disappeared six months previously, is still alive.
That evening, Rigg is attacked in his home; upon awakening, a videotape informs him that Matthews is still alive, with ninety minutes to save himself, with Hoffman's life at stake as well. He finds Brenda (Sarain Boylan), a female pimp, chained to a chair with a pig mask covering her face. The first test, "see what I see," is for him to leave her there; he ignores the message and ends up triggering a device to begin peeling her scalp off. He manages to free her, but she attacks him; she had been told that she would be arrested if Rigg saved her unless she killed him first. He throws her into a mirror and leaves; her corpse is later found by police, led by Strahm and Perez. Rigg's next test takes place at a motel, where the words "feel what I feel" are painted on a door. He forces the manager, Ivan Landsness (Marty Adams), into a prearranged trap; pictures around the room show that Ivan was a serial rapist. Ivan must choose between blinding himself with blades or being dismembered. After Rigg leaves, Ivan only manages to blind one eye before time runs out and his limbs are ripped off. The third test, "save as I save," takes place at a school where Rigg once attacked a man named Rex, who abused his wife and daughter. He finds Rex and Morgan, his wife, hanging back-to-back from a harness with several rods impaling them together. The rods are placed through vital arteries in Rex's body, but through non-vital areas in Morgan's; she can live by removing the rods while he will die either way. Rigg finds her with one rod left; he hands her the key to her harness and leaves, setting off the fire alarm as he does, for his final destination.
Meanwhile, Strahm and Perez alternate between interrogating Jill Tuck (Betsy Russell), Jigsaw's ex-wife, and investigating the scenes of each victim's trap. The two discover that they are Jigsaw targets as well, and that Art Blank, a lawyer who had gone missing two weeks previously, had successfully defended each victim of their crimes; he was also Jill's lawyer. When Perez is hospitalized after an incident at the school involving Jigsaw's puppet, which also predicts that Strahm will "soon take the life of an innocent man," Strahm furiously interrogates Jill, who reveals the rest of Jigsaw's backstory. She had been pregnant with a baby to be named Gideon, after John's first project as a civil engineer, but miscarried after drug addict Cecil Adams (Billy Otis) robbed her clinic; this would later drive her and John into divorce. After John learned of his cancer and survived his suicide attempt, he began his work testing others, targeting Cecil first. He placed Cecil in a trap where Cecil was to push his face into several knives to release himself, but the trap collapsed and he blindly lunged at John, who sidestepped and allowed Cecil to fall into a tangle of razor wire. Additionally, Art Blank is revealed to have worked with John before. Strahm connects this story with the Gideon Meatpacking Plant, the location of Rigg's final test. He arrives shortly after Rigg, but ends up trailing Jeff Denlon (Angus Macfadyen), who is making his way to the makeshift sickroom of the plant. He eventually catches up to Jeff in the sickroom; Jeff waves a gun at Strahm, demanding to know where his daughter is, and Strahm kills him in self-defense, fulfilling Jigsaw's earlier prediction.
Simultaneously, Rigg is on a trail leading to a large room containing Hoffman, Matthews and Art Blank. Matthews stands atop an ice block with a noose around his neck, and Hoffman is tied to a chair with a gag in his mouth and an electrode at his feet. The two are at opposite ends of a balanced scale, and if too much ice melts or Matthews slips off the block, he will be hanged and Hoffman will be electrocuted by the melted water reaching the electrode. Two more ice blocks are positioned on the ceiling, set to swing down and crush Matthews' head if the door to the room is opened. Art must monitor them while a device on his back is set to cut through his spine; he can only release them and himself after ninety minutes have passed. When Rigg arrives, Art and Matthews attempt to ward him off, and Matthews shoots Rigg, though he still makes it through the door with one second left on the clock. Rigg shoots Art just as Matthews is killed by the ice blocks. He then kills Art, believing him to be responsible for the trap, and learns from the tape recorder in Art's hand that he has failed the test by interfering; Matthews and Hoffman would have lived if Rigg had not tried to save them. An unharmed Hoffman releases himself and leaves Rigg to die, revealing himself as the second accomplice. He arrives in front of the sickroom just as Strahm kills Jeff, and seals Strahm inside with the four corpses. He is later called to Jigsaw's autopsy, which took place after the events of the film. It is now revealed the events of Saw III and this film are taking place simultaneously.