Final Fantasy X-2 begins as Yuna, Rikku and Paine recover Yuna's stolen Garment Grid from the Leblanc Syndicate in the first of several encounters in which they vie for spheres. The game is punctuated by a narration of Yuna addressing Tidus, as though she is recounting the events of the game to him as they occur in a style reminiscent of Tidus' own narration in Final Fantasy X. Although Yuna's quest is to find clues that may lead her to Tidus, much of the storyline of the game follows the clash of the factions that have established themselves in the time since the coming of the Eternal Calm in Final Fantasy X, and the uncovering of hidden legacies from Spira's ancient history. A significant portion of the game's events are unnecessary for the completion of the main storyline, but much of the depth of the story — including characterization and background details — are featured in the optional content, which generally follows how each part of Spira is healing in the time since the passing of Sin.

As the game progresses, the hostilities between the Youth League and New Yevon build to a head. In the meantime, the Gullwings discover an ancient sphere containing images of an enormous machina weapon called "Vegnagun" that was secretly buried beneath the city of Bevelle. The weapon has enough power to threaten all of Spira, and, moreover, it is revealed to the player that Vegnagun is unable to distinguish friend from foe once activated. The Gullwings then join forces with the Leblanc Syndicate to investigate the underground areas of the city in an attempt to destroy the machine before it can be used by either side in the upcoming conflict. However, discovering a large tunnel recently dug into the floor of the weapon's chamber, they realize that Vegnagun has apparently been moved to the Farplane, located at Spira's core.

Disagreements between Spira's factions are soon punctuated further after the disappearance of Baralai, Nooj and Gippal — the leaders of New Yevon, the Youth League and the Machine Faction respectively. Returning to the underground areas of Bevelle, the Gullwings discover the missing faction leaders discussing Vegnagun and learn that the machine's artificial intelligence allows it to detect hostility and to respond by activating itself and fleeing. Additionally, it is revealed that Nooj had come to Bevelle with the intention of destroying Vegnagun previously, prompting it to flee to the Farplane. The player then learns that Paine had once been friends with all three men, assigned to be their sphere recorder while they were candidates for the Crimson Squad, an elite group intended to be assigned leadership of Crusader chapters across Spira.

Two years earlier in a cave beneath Mushroom Rock Road called "the Den of Woe", just before the failed Operation Mi'ihen, the squad's final exercise was conducted. Within the cave, the various squad candidates were swarmed by pyreflies and driven to kill one another. The only survivors were Paine, Baralai, Gippal and Nooj, who were themselves targeted by the Yevon order afterward when they revealed having seen images of Vegnagun while in the cave. Soon after, Nooj shot his surviving comrades and left them to die, severing the friendship the group had with one another. However, at this time, it is revealed that he was not acting of his own accord when he shot them. The feelings that drove the squad members to kill one another are revealed to have been the despair of the game's antagonist, Shuyin, who died 1000 years earlier. Before the four survivors could leave the cave, the spirit of Shuyin — requiring a host in order to interact with the world physically — had possessed Nooj, and later forced him to shoot his comrades. In the time since, Shuyin had been subtly goading Nooj on a subconscious level, coercing him to approach Vegnagun so that he could use Nooj's body to control it.

Nooj's will was too strong for him to be completely controlled, and his desire to de