This paper extends the stochastic electrodynamic framework of Paper 1 [3] to multiparticle systems, providing a physical derivation of quantum entanglement. When a highenergy gamma ray creates an electron-positron pair, both particles emerge from the same spacetime point and share a common virtual photon cloud. We propose that the electromagnetic vacuum retains a cross-correlation component S(12) E (x1, x2, ω) in their joint virtual photon field, arising from the common creation event. The spatial dependence of this cross-correlation—a sinc(ωr12/c) factor—is derived from the known two-point vacuum correlation function of the electromagnetic field, not postulated. This cross-correlation is identified as the physical carrier of quantum entanglement. The two particles undergo correlated Brownian motion in six-dimensional configuration space, each with diffusion coefficient D = ℏ/2m derived in [3]. Nelson’s stochastic mechanics in configuration space gives the two-particle Schrödinger equation. The foundational ergodicity assumption underlying Papers 1 and 2—that the coupled electron-vacuum system admits a unique stationary ergodic measure—is proved in the companion Paper 3 [4] via the Caldeira—Leggett model and the Ford—Kac—Mazur theorem. The EPR paradox is resolved: the instantaneous correlation upon measurement is a consequence of conditional probability applied to a joint stochastic process, not a physical signal. Bell inequality violations are derived explicitly: the cross-correlation is nonlocal in configuration space, bypassing Bell’s locality assumption while satisfying the no-signalling theorem. Decoherence arises naturally as disruption of S(12) E by environmental electromagnetic noise. Fermi and Bose statistics emerge as boundary conditions on the joint stochastic process in configuration space.