Finally released from prison, Elwood Blues is once again enlisted by Sister Mary Stigmata in her latest crusade to raise funds for a children's hospital. Hitting the road to re-unite the band and win the big prize at the New Orleans Battle of the Bands, Elwood is pursued cross-country by the cops.

The hero and heroine want to popularize a trad jazz in their town. Some older people feel displeased about a trad jazz, and prevent their trying. The hero and heroine go to London television studio to ask trad jazz musician to support their trial.