Real Bout 2 revamps the two-line battle system from Real Bout Special. Instead of fighting in either two lines, the player is now forced to fight in a main line, while the second line is a "sway line" used to avoid attacks (similar to the original Real Bout). The one-line trap stages last seen in Fatal Fury Special also return.
The character roster from Real Bout Special returns, including Geese Howard, who is now a normally selectable character, and serves as one of the standard final bosses, alternating with Wolfgang Krauser. However, the extra versions of Tung, Mary, Andy, and Billy are gone. Two new characters are introduced: Li Xiangfei, a Chinese American waitress; and Rick Strowd, a Native American boxer. The game also features biplane pilot Alfred (the protagonist from Dominated Mind, the PlayStation version of Real Bout Special), as a secret final boss.