Six hundred years ago, King Winder sealed the evil Demon Zakdos within a casket, bringing an end to the dark war. The great wizard Colin vowed that he and his descendants would build and protect a temple around Zakdos' prison. However, when a thief enters the temple and breaks the casket, Zakdos is released, killing off all that remains of Colin's clan except for a young boy named Mute.
The Sword of Hope was also stolen, and Prince Theo must now stop Zakdos and retrieve the sword before an evil dragon awakens. With the help of Mute and other characters, Prince Theo embarks on a quest to save the world from destruction. One notable difference between The Sword of Hope II and its predecessor is that players now control a party of up to three characters, rather than just Prince Theo.
The game is played from a first-person perspective, where the party can be moved by selecting an arrow pointing in the desired direction. Players can choose commands such as "look", "open", "hit" etc. to explore and manipulate the game world, talk to NPCs or solve puzzles. When encountering enemies, players enter a turn-based battle mode, where they can attack, use items and magic or try to escape.