The game features Dungeons & Dragons-style characters and follows in the footsteps of its predecessor, The Bard's Tale, also created by Michael Cranford.

Although it received mixed reviews upon release, The Bard's Tale II won the Origins Award for Best Fantasy or Science Fiction Computer Game of 1986.

In The Bard's Tale II, players lead a band of adventurers searching for seven pieces of the broken Destiny Wand in The Realm.

Players achieve victory after finding the pieces, defeating the Archmage Lagoth Zanta, and reforging the Wand.

After acquiring the seventh segment, players are ready to assemble the Destiny Wand and face their final battle with Lagoth Zanta.

They can be imported from The Bard's Tale, Wizardry: Proving Grounds of the Mad Overlord (on Apple II versions),[8] or Ultima III: Exodus.

[10] Character classes available at the start are the warrior, paladin, rogue, bard, hunter, monk, conjurer, and magician.

[12][b] In the early stages of the game, the party's fighters are important in combat, while spellcasters are dominant later due to monster strength.

[18][14] The party's spellcasters typically occupy the bottom character slots, allowing them to use magic with the fighters in front.

[23] When ready, a party can venture into a dungeon to explore, fight monsters, and gain the experience to advance levels and complete their quest.

[16] Lack of light and other hazards in later dungeons make mapping challenging, although there is an automap feature in the game's remastered version.

[16] Solving one of these puzzles provides the party with a segment of the Destiny Wand, while failure results in their demise.

[16] The initial The Bard's Tale II release was part of a series of evolving 1980s fantasy role-playing video games.

[30] According to reviewer John Ryan in 1989, "By the time Bard's Tale II: Destiny Knight ... appeared in 1986, it found an active gaming public with a voracious appetite for more of the saga.

[29][34] The Bard's Tale II won the Origins Award for Best Fantasy or Science Fiction Computer Game of 1986.

In Computer Gaming World, Scorpia noted several improvements over the original, such as an easier start and more easily recognizable buildings.

However, she thought the snares excessively tedious, interactions with the Sage challenging, and the gameplay skewed heavily in favor of mages.

[38][39] Reviewer James Trunzo echoed Scorpia's comments about excessive repetition in snares and frustrating interaction with the Sage, requiring precise wording of questions.

It is a very difficult and challenging game, and it requires great intestinal fortitude", and suggested that beginning adventurers avoid it.

[44] Michael Bagnall also stated in 1987 that due to the number of new features, "It is its own game, whose design is familiar enough that veterans can leap right in, yet with so many unique elements that it will challenge and enthrall them even more than the original.

"[15] During the 2015 Kickstarter campaign for The Bard's Tale IV: Barrows Deep, inXile partnered with Rebecca Heineman and her company Olde Sküül to remaster the original trilogy for modern personal computers running Mac OS and Microsoft Windows (verus inXile's emulated versions).

[45] After reaching an impasse in development, Olde Sküül and inXile agreed to transfer the project to Krome Studios.

[46] On October 23, 2018, Krome Studios released a remastered version of The Destiny Knight as part of a series remake.

[33] In 2018, Alex Santa Maria stated that The Destiny Knight was part of "One of the most classic franchises in PC gaming".

[26] In 2023, Scott Orgera listed the Bard's Tale trilogy, including The Destiny Knight, as one of the "10 Best Offline RPGs to Play in 2023" as the "Best Old-School RPG".