Similar to Defender, the player occupies a side-scrolling level that repeats indefinitely, and in which the player can freely travel left or right. Each zone contains several "bases" that serve as primary targets. New to the sequel are "warps" hidden behind certain bases that allow the player to travel between different zones. Each level has at least three zones, and when all of the bases have been cleared in all of the zones of a level, the player can travel through the warp to the boss.

Boss fights do not allow for free travel as the main stages do, and force the player to face the boss or face a particular direction. Bosses are generally very large and change color to reflect damage taken. The final stage is a "boss rush" in which the player must fight a succession of previous bosses before fighting the final boss.

There are two action buttons that correspond to two types of attacks, "fire" and "bomb." The fire attacks shoot horizontally, as in a typical shooter, and different variants can be purchased at shops. The bomb attacks are more powerful, and the basic bomb drops downward as in Scramble. Other variants have other behaviors and are limited in quantity (unlike the basic bomb).

Shops, uncovered at key points, allow the player to purchase upgraded weapons, bombs, and speed, as well as extra lives. Upgrades to Opa-opa's speed (such as larger wings, or jet engines) are permanent as long as the player does not lose a life, but weapon upgrades are time-limited, and bombs limited in quantity. Items become increasingly expensive with subsequent purchases, encouraging the player to vary his purchases.

The arcade version of Fantasy Zone II is based on the System E board, and as a result, is almost identical to the Master System version. Differences include the use of the radar that shows which bases are destroyed or not, as well as the use of a timer that, when it reaches zero, the player will lose a life. If the player manages to clear a level, the timer's remaining seconds will add to the score and money.

In September 2008, Sega released a remake of Fantasy Zone II, included on the compilation Sega Ages Vol. 33 Fantasy Zone Complete Collection. Developed by M2, the game is not an attempt to modernize an older work like most remakes, but rather a hypothetical interpretation of what the game might have been like, had it been developed for System 16 arcade hardware by the original staff, rather than by Sega's console R&D for the Sega Master System and System E boards. It has been described as a "What If" remake, and strictly adheres to the technical limitations of the time in which Fantasy Zone II was originally released.

For the sake of authenticity, M2 developed the title on real System 16 hardware (albeit with a memory configuration expanded to 256KB, which M2 dubbed System 16C), and is playable in the compilation via emulation. It shows a 1987 SEGA copyright, makes no mention of M2, and bears no titular distinction from the original game. Because of this it can be easily confused for a real arcade title from 1987. Fans have dubbed this version Fantasy Zone II DX to distinguish it from the original versions.

It follows the original Fantasy Zone II only very loosely, pulling enemies, music, locations, and gameplay elements from the Master System game and pairing them with completely new content and elements of the original arcade Fantasy Zone. The most notable change is to the level structure. Rather than having several distinct zones in each stage that must be cleared, each stage in the remake has two parallel dimensions (Bright Side and Dark Side) of comparable size to the levels in the first Fantasy Zone. Bases destroyed in one dimension will also be destroyed in the other, making it possible to clear the level entirely on one side or the other. The Dark Side is more difficult, but offers greater rewards in points and money earned. Bosses are the same on either side, but have considerably more difficult attack patterns on the dark side. The game also features three endings, which depend on both whether the Dark Side levels were cleared and whether some specific items were bought.

The music, arranged by Manabu Namiki, uses melodies from many songs from Tokuhiko Uwabo's original Fantasy Zone II soundtrack, but is calculatedly rearranged in a style more similar to that of the original Fantasy Zone's composer, Hiroshi Kawaguchi. There are also entirely original songs in the soundtrack. Stages and enemies are largely based on themes from the original, but some are difficult to recognize. Only about half of the games bosses correspond to those in the original. It is generally regarded as very loose interpretation of the original.

The game was bootlegged and released to the arcades under the title FZ-2006 II by Korean manufacturer ISG. The bootleg bears a 2006 copyright date but actually appears to be derived from the 2008 PlayStation 2 release due to it containing the same "2008-07-15VER" string embedded in the ROM data.

• Rieko Kodama