It has been over a decade since the events of Labyrinth, wherein Sarah Williams defeated the Goblin King and rescued her baby half-brother, Toby. Jareth, the Goblin King, has watched as Toby grows up into a teenager, secretly giving him everything he desired regardless of its attainability, propriety or scale. Through the years, Toby noticed the strange way all his wishes came true, but never understood the reason behind it. Despite this, he seems to have grown up into a reasonably well-adjusted teenage boy. He has no memory of the time that he was kidnapped by goblins and no idea of Sarah's rescue of him. Sarah herself has become a teacher. Jareth has been watching Toby, it seems, because he still intends for Toby to become his heir. A deadline is drawing near and other individuals, including a mysterious queen and the mayor of Goblin City, are eying the throne. Jareth eventually lures Toby back to the Labyrinth, where he meets various creatures, including some that his sister encountered during her own adventure.