It is a cold, stormy night in Isle o Hags. It has been two years since Banjo and Kazooie defeated the evil Gruntilda. Ever since then, Klungo has spent his time trying to move the boulder that keeps Grunty underground at Spiral Mountain. Klungo has made no progress so far, but here comes Grunty's sisters, Mingella and Blobbelda, in the giant digger machine, Hag 1, into Spiral Mountain. Mingella, with the help of her spell book, uses a spell to blast the boulder, freeing Grunty! Earlier, Banjo, Kazooie, Mumbo Jumbo, and Bottles the Mole are playing cards at Banjo's house. Kazooie yells out that Grunty the witch is coming, and when everyone turns around, takes a pile of Mumbo's cash. The gang hears a noise outside, and Mumbo goes to investigate. Mumbo hides behind a rock and watches as Grunty is freed from the ground by her sisters, and goes running back to Banjo's house. When Mumbo gets back to the house, he tells everyone that Grunty the witch really is coming, and Banjo tells everyone to get out of the house. But because of Kazooie's previous prank, Bottles doesn't beleive Mumbo, so Bottles stays inside. Grunty fires a spell and blasts Banjo's house to bits, but the gang had already safely escaped. Grunty gets inside the Hag 1 with her sisters and drives off, telling Klungo to stay behind and to stop the duo, and also sending out troops of Gruntlings and Gruntdactyls into Spiral Mountain. After the storm is cleared, Banjo, Kazooie, and Mumbo return to Banjo's house to find it in ruins. As they are talking, Bottles, slightly burnt and smoking, slowly walks out of the house. He gets up to Banjo, and then collapses, and a ghost of Bottles floats out of the corpse. As Humba Wumba would say, big heap bummer. Mumbo runs off to his skull, claiming they will see him later, and the duo begins their second adventure to stop Grunty, once and for all!