The second of the Tokyo Xtreme Racer 2 's gameplay is nearly identical to the first one. There are no specific start or finish lines, it all depends on how well you drive and how fast. This time around, there are more opponents to beat, roughly 120, and plenty of new cars to choose from.
Like other installments in the series, Tokyo Xtreme Racer 2 implements a system found most commonly in fighting games, where each player has a life bar and the player with remaining life wins the race. Different factors can cause the life bar of a player to deplete, including hitting into objects, other cars, or just simply falling behind the lead car.
The story takes place in Tokyo's streets, where players take on various opponents in high-speed racing challenges. Players must use their driving skills and tactics to outmaneuver their opponents and emerge victorious.