Golden Axe II is a side-scrolling arcade-style (it was also actually released on arcade machines) hack 'n' slash game, very similar to the first Golden Axe. The player is given a choice of three fighters: an axe-handling dwarf named Gilius Thunderhead, a barbarian named Ax Battler who wields a two-handed sword and longsword-brandishing amazon named Tyris Flare. Each of the fighters has a unique elemental form of magic which can be used at any time in the game to inflict damage upon enemies. Each player is given a set of life bars, which are lost one by one if the player is hit.
Though the characters and gameplay were virtually unchanged from the first game, there were a few improvements. The "back attack" (performed by pressing the Jump and Attack buttons simultaneously) for each character was changed to a more useful attack that hit enemies on all sides. Enemies could now be thrown in either direction by pressing right or left on the D-pad immediately after picking them up, making it easier to hit other enemies with them or throw them off cliffs. Most importantly, the magic system was overhauled. In the first game, pressing the magic button used all of the player's magic pots. In this game, the player could now use part or all of their magic by holding the button and releasing it when the meter reached the desired level. The magic for each character was also changed; Ax Battler's "exploding" magic from the first game was replaced with wind magic, and Gilius Thunderhead now used rock magic instead of lightning. Tyris Flare retained her fire magic, but was still given entirely new animations for it. Ax Battler now has a longer reach with his weapon than Tyris (in the first Golden Axe, Ax Battler and Tyris had an identical reach) and can throw enemies higher and further. Finally, there were small cosmetic changes in the form of a shoulder guard for Ax Battler and black gauntlets for Gilius Thunderhead.
There are two types of game modes. One is "The Duel", where players are pitted against enemies in an arena, battling one after the other and gradually getting more difficult. The other is normal mode, where players must navigate through different areas battling various enemies.
Between each level, a rating is awarded to the player(s) based on their performance, with a final rating given at the end of the game. A small exposition of the main story is also shown.
