Manhunt 2 takes place in the Dixmor Insane Asylum, where staff members instead of treating patients, engage in brutal behavior. A power outage allows the patients to revolt, and the player can choose to play as Dr. Daniel Lamb or Leo Kasper. The game's story does not continue from the first game.
The gameplay is largely stealth-oriented, with later levels offering more action as firearms become available. Players must use cover and maneuvers to succeed in gunplay, while also utilizing stealth to evade enemies. A radar system tracks enemy awareness, and kills are often performed from the shadows. Players can use objects to distract enemies or make noises to lure them away. To hide in the dark, a quick mini-game is required.
Players can perform executions, with three styles: Hasty, Violent, and Gruesome. These feature explicit violence, including strangling, beatings, and gun violence. Some of these kills are censored with blacked out scenes or camera cuts. In the Wii version, players must mimic the motions needed for a kill using the Wiimote and Nunchuk.
All versions share similar gameplay mechanics. The Wii edition includes three exclusive weapons: bottle, mace, and razor. Other versions have a samurai sword as a unique weapon. The Wii version also features a short tutorial to familiarize players with the controls. Additional changes include more detailed environments, new dialogue, and altered hunter encounters in the Wii edition.