The wedding of Will Turner and Elizabeth Swann is interrupted when Lord Cutler Beckett, chairman of the East India Trading Company, arrives with arrest warrants for them, and also for Commodore James Norrington, who allowed Captain Jack Sparrow to escape. Norrington has resigned and disappeared after losing the Navy's flagship, HMS Dauntless, in a hurricane while pursuing Jack. Meanwhile, Jack is visited by Will's father, Bootstrap Bill Turner, aboard the Black Pearl. Bootstrap is a crewman on the Flying Dutchman, captained by Davy Jones. Jack previously bartered a deal with Jones to raise the Pearl from the depths, and must now join the Dutchman's crew or be dragged to Davy Jones' Locker by the Kraken. Meanwhile, Beckett has a meeting with Will, where he reveals that he has Letters of Marque for Jack Sparrow signed by the king. Beckett offers to validate Will and Elizabeth's freedom if Will goes on a journey on behalf of the East India Trading Company to recover Jack's compass for Beckett's use.

Will finds Jack and the crew on an island and frees them from cannibals. After escaping the cannibals, Jack and the crew visit voodoo priestess Tia Dalma, who reveals Jones' weakness is his heart, locked within the Dead Man's Chest; Jack intends to find it and free himself from Jones' service. Locating the Dutchman, Will makes a deal with Jack to find the key to the chest in return for Jack's compass, but is tricked into joining Jones' crew in Jack's stead. Jones agrees to release Jack from their bargain in exchange for ninety-nine more souls. Will meets his father aboard the Dutchman and learns that Jones possesses the key to the chest. Despite losing a game of Liar's Dice to Jones, Will escapes with the key and is taken aboard the same ship Elizabeth was on. Jones sends the Kraken after him and sinks the ship, but Will again escapes.

Meanwhile, Elizabeth's father Governor Swann frees her from jail but is captured himself. Elizabeth bargains with Beckett to find the compass herself and makes her way to Tortuga, where she finds both Jack and a drunken Norrington. Jack hires a new crew, including Elizabeth and Norrington, and Elizabeth uses the compass to find the chest. All parties arrive on Isla Cruces, where the chest is buried, but a three-way sword fight breaks out between Jack, Will, and Norrington, who all want the heart for their respective goals: Jack wants to call off the Kraken and negate his debt to Jones; Will wants to release his father from the Dutchman; and Norrington wants to regain his life as a Navy officer. In the chaos, Norrington secretly steals the heart and runs off, pretending to lure away the Dutchman's crew. Jones attacks the Pearl with the Kraken, which kills most of the crew and destroys all but one of the Pearl's lifeboats, but Jack, who briefly fled the battle, returns and wounds the Kraken with a net full of gunpowder and rum.

Jack orders the survivors to abandon ship, but Elizabeth, realizing the Kraken only wants Jack, tricks him by kissing him and chains him to the mast so that the crew can escape. The Kraken drags Jack and the Pearl to Davy Jones' Locker. Jones declares their debt is settled, but discovers, to his rage, that his heart is missing from the chest. In Port Royal, Norrington gives Beckett the heart and the Letters of Marque meant for Jack, allowing him back into the navy, as well as allowing Beckett to gain control of Davy Jones and the seas. The Pearl's crew takes shelter with Tia Dalma, where they all agree to rescue Jack. Tia Dalma introduces the captain who will guide them: the resurrected Hector Barbossa.