Basic gameplay remains the same as before: players must perform dance moves in rhythm with the music and on-screen dancers, using body movements tracked by the Kinect sensor. Game modes include single-song performances, head-to-head dance battles, a "break it down" training mode, and a new story mode called "Crew Challenge". In this mode, the player takes on the role of an up-and-coming street dancer trying to impress local dance crews. The game also features improved two-player modes with simultaneous dancing for both players.
The game features 44 songs on-disc, with additional DLC tracks available for import from the first game. A further set of 32 non-backwards compatible DLC songs were released after the game's release date, October 27th, 2011.