Following the adventures of the first Chocobo Dungeon game, Chocobo and Mog continue to search for treasure. One day, Mog discovers a new Mysterious Dungeon and takes the treasure from inside. This releases a seal which causes the Bahamut to appear just as the dungeon plunges into the ocean. Chocobo is rescued by a young white mage, Shiroma, who is the only human living in the monster village. Chocobo must help Mog, find Bahamut and fix whatever has been unsealed from the Mysterious Dungeon.
Chocobo's Dungeon 2 is an action RPG in the style of other games in the Mysterious Dungeon series. Chocobo must descend into dungeon areas alone or with a partner (controlled by artificial intelligence or the second player), gathering treasure, while finding the passageway to the next floor and satisfying hunger. The game is viewed from the top down as all objects on the screen move at the same time. Chocobo can equip a single weapon and armor item, while the hunger level is satisfied by eating different forms of nuts. Spells can be collected, while successive casting increases the proficiency in that spell. Unlike other Mysterious Dungeon games, Chocobo keeps his level and stats between trips to the dungeon. Boss monsters wait at the completion of most objectives. Different sub-quests are available from the residents of Monster Town.
Along with Chocobo and his partner Mog, a few other familiar names appear from the Final Fantasy series. Cid is an inventor who lives in a tower on the edge of monster town. Biggs and Wedge are black mages at the Black Mage Research in the monster town.
The lead female's name, "Shiroma" is short for white mage. Shiroi is the Japanese word for white.
Chocobo no Fushigi Dungeon 2 means "Chocobo's Mysterious Dungeon 2".