King of the Monsters 2 is a 2D wrestling/fighting game with three monsters for players to select. Once the monster selection is completed players must guide their monsters through a series of stages consisting of parts of various famous world cities. Each level consists of a short side-scrolling portion in which the player's monster must deal with things like attacking tanks and ships. At the end of the side scrolling portion the alien boss monster appears for a fight.
The buildings and vehicles in the stages sometimes give up certain items when destroyed. The best type to collect is the power-up icon; up to two of these can be collected to boost the monster's strength. There are also icons that make monsters move faster or slower, drain collected power-up levels, explode for damage, or just provide points. Accumulated power-up levels carry over into subsequent stages.