Jim and Suzy drift peacefully through Crystal Lake on his houseboat - at least until its anchor snags an underwater power cable and drags it to the submerged body of Jason Voorhees! As Jim and Suzy make love, Jason boards the boat and kills the two teenagers.
The graduating class of Lakeview High boards the SS Lazarus, bound for New York City. Boarding the ship with her teacher Miss Van Deusen, Rennie Wickham is accosted by her uncle (and trip chaperone) Charles McCulloch. Despite his obvious displeasure at her attendance, she boards and meets up with her boyfriend Sean Robertson. Sean also has problems with his father, Admiral Robertson, the captain of the Lazarus. But their personal problems are about to become secondary to one big problem - Jim's boat drifts by and the Lazarus picks up an unwelcome stowaway...
Soon JJ is killed by Jason when she goes below decks to jam on her guitar. Rennie is assailed by visions of a young Jason, and her dog Toby runs off. Elsewhere, Julius pummels a hapless opponent in a boxing match. Above, Tamara and Eva watch the match, and then head off (at Tamara's request) to do some cocaine. They are interrupted first by Rennie, then by her uncle. Jason kills Julius' opponent in the sauna while Tamara, afraid of being ratted out by Rennie, knocks her overboard. Rennie can't swim, and is first hit with visions of a young Jason as she flails in the water, and then again in the restroom after being rescued by Sean.
After Tamara gets Wayne to tape McCulloch in a comprimising position with her, she is stabbed with glass shards by Jason. A storm breaks out, and Jason makes his way to the bridge to kill the first mate and the Admiral. Sean and Rennie, going to radio the Coast Guard to get off the ship, find the bodies and call everyone to the bridge. Jason cuts the radio, and everyone splits up to find the killer. Eva finds Tamara's body, is chased into the dance room and killed. Below decks, Wayne loses his glasses and accidentally shoots a crew member before being thrown into an electrical panel by Jason.
A fire breaks out below as Sean tries to get the ship back on course. Miles is killed by Jason and Julius is thrown overboard. Rennie has another vision and then is attacked by the real Jason, who she stabs in the eye. Below, the fire causes the fuel tanks to explode and most of the kids onboard are killed. The crazy deck hand is axed in the back by Jason and only Rennie, Sean, Miss Van Deusen, Rennie's dog and McCulloch make it to the lifeboat. In the water, Julius climbs aboard.
Julius and Sean row from the sinking Lazarus to New York. Once there, the group is accosted by two thugs who take Rennie away and inject her with a filthy syringe. The others split up to look for help, and Jason kills the two thugs. Rennie escapes but Julius runs into Jason. After a valiant fight, Jason literally knocks Julius' block off, sending his head flying. The others find each one another, along with an cop who lets them into his cruiser. On the dash sits Julius' head, and the cop is dragged away by Jason. Rennie takes the wheel and slams the car into Jason. But when she tries to run down a vision of the young Jason, she rams into a wall. The car explodes, and Miss Van Deusen is killed.
The trauma forces Rennie to remember her childhood, when her uncle took her out on Crystal Lake. He pushed her overboard to teach her how to swim, and she had a vision of Jason then. Sean and Rennie run off, leaving McCulloch to be killed by Jason. They are chased by Jason through the subway and Times Square, but he is eventually stopped in the sewers when he is submerged by toxic waste.
- The original posters for the film featured Jason ripping through an "I Love NY" poster. In the first poster, Jason is holding a bloody knife which was cleaned in a second poster for fear that the blood was too graphic. However, both posters were dropped following a complaint from the New York Tourism Committee.
- Kane Hodder says that one of the most fun parts of his tenure as Jason was the scenes in Times Square. He says that spectators were lined up and down the block watching the filming, and he didn't want to take off the mask to destroy their illusion of Jason. He said that every once in awhile, he'd turn his head and look at them, and watch them all go crazy.
- In the original script, when Jason makes it to the dock, a dog starts barking at him and he kicked it. Kane Hodder, who was playing Jason, felt that kicking the dog was going too far and so the scene was dropped.
- Writer/Director Rob Hedden originally wrote more of the movie to be set in New York. He had written scenes at Madison Square Garden, the Brooklyn Bridge, and the Empire State Building. But Paramount told him that budget would not allow him to spend that much time in New York, so he was forced to rewrite the film and spend more time on the cruise ship. Hedden says he agrees with fans who complain that not enough time is spent in New York, given the title Jason Takes Manhattan.
- This was the final Friday The 13th film to be distributed by Paramount Pictures. Due to low box office, Paramount sold the franchise to New Line Cinema. However, they did distribute the 2009 remake outside of the United States.