The player plays as Chocobo, navigating randomly-generated levels of mysterious dungeons to progress the story.

There are several partner characters, most of which will be recognizable to Final Fantasy veterans, including Cid; a young white mage girl, Shiroma; and Mog, a moogle.

While progressing through the game, the player can leave extra items in storage space rented in the town.

[2] These actions may be augmented by feathers, which provides special abilities such as kicking items through wall, unlocking area of effect spells, and substituting the partner with powerful summon characters.

After watching the credits when the game ends, the player is offered a new mode where they can revisit any dungeon using one of Chocobo's partners.

Chocobo encounters the white mage Shiroma who leaves, claiming there is important work for her to do in the dungeon.

Squaresoft announced Chocobo's Dungeon 2 in July 1998, alongside plans to release the game that December.

[6] They also noted that it seemed to generate the least amount of "fanfare" or press attention of Square's announcements at the 1999 Tokyo Game Show.

[17] David Zdyrko of IGN called the game "boring", and said that "it lacks just about every feature that is important in a masterful role-playing experience".

[22] George Ngo of GameFan called the game "slow-paced, drab and gloomy", saying the gameplay is repetitive and boring, and describing the dungeons as mono-colored.

[19] E. Coli of GamePro said that Chocobo's Dungeon 2 is primarily aimed at a younger audience due to its cuteness in the game, also saying that the seasoned players would not find anything new in it.