The Godfather II takes place on New Year's Eve 1958, where Hyman Roth celebrates the Corleone family's expansion into Cuba. However, "la revolucion" breaks out, and Michael Corleone escapes with most of the family members, while Aldo Trapani, the main protagonist in The Godfather , gets killed. This sets off a chain of events as five new families threaten the Corleone family's control over New York, Florida, and Las Vegas. As one of Aldo's closest soldiers, the player takes on the role of Dominic to help Michael and the Corleone family win the war and build their own family.
The game features a strong focus on strategy and management as Dominic moves freely between three cities - New York, Florida, and Cuba - traveling by airplane. The main goal is to grow his family and destroy the other five families in two main steps: taking over businesses and eliminating "Made Men". Taking over a business involves fighting through enemy guards and finding the person with the Godfather-sign, then intimidating them into paying their dues.
Each business owner has a weak spot and a breaking point, which can be exploited to gain money or defeat them. However, if the player pressures them too much, they become aggressive and attack without mercy. The player also needs to hire guards to protect businesses and defend against enemy attacks. Hiring soldiers with specializations allows Dominic to learn new skills and upgrade his abilities.
The game features a complex system for managing made men, where each has a time window to be revived if downed by enemy fire. Using favors from random people or high-ranking officials can reduce this time window and gain benefits. Killing conditions are needed to eliminate enemy made men permanently, and the player must make an example of them to fulfill these conditions.
The game also features a multiplayer mode that ties in with the single-player campaign. In this mode, the player chooses one of their hired family members and takes on their role, earning honor points for their family member. These points can be used to buy new weapon licenses, allowing Dominic's soldier to use higher-level weapons.