Two centuries have passed since Queen Katia saved the land of Argwyll and brought peace to the kingdom. Katia, and all the queens since, are able to keep peace in the land and defeat enemies with the help of a powerful runestone. This runestone gives the ability to control numerous and powerful monsters. But after all these years, the peace is being threatened for the skilled craftsman in the region of Kendarie have found a way to manufacture artificial runestones. Although not as powerful, they have created many of them and begun to prepare for a war. You play the game as Tara Grimface, an orphan, thief, and warrior. Tara also possesses a runestone, and in the beginning she uses it to help out a group of bandits. But soon you will have to help her discover her true past and save the land from the rising threat.

The gameplay in Lost Kingdoms II is similar to the original. There are many lands to explore, with various monsters throughout. You defend yourself in battle with the help of a deck of 30 cards you bring on each level. Each card has the ability to summon a different type of monster, each with its own strengths and weaknesses. As levels are completed, new locations become available and the story will unfold.