Kao the Kangaroo Round 2 is a third-person perspective platform game about a young, cute, yellow kangaroo, who saves animals from the hands of the evil Hunter and his equally evil colleagues. In order to bribe the guard and get aboard Hunter's ship, Kao must collect lots of coins scattered throughout the game. The main character can fight with his boxing gloves and can throw lethal boomerangs.
The game consists of 25 levels in 5 different worlds. Playing through the levels, the player must jump over platforms, make difficult leaps, and fight about 30 different types of enemies, free captured friends and solve many puzzles. Occasionally Kao will get to ride a vehicle like a barrel or a snowmobile.
Kao can also find purple crystals, which can be spent to buy minigames to play. There are also stars - collecting 50 of them will upgrade one of Kao's abilities, e.g. giving him the ability to stomp on the ground to defeat enemies around him. A rarely encountered item is a winged helmet, which, when grabbed, allows Kao to fly for a short while.