The game utilizes a procedural damage system that allows players to cut and blow off enemy limbs and body parts. Every mission, except for story-specific events, will feature procedurally generated level design and content, including randomized enemy positions, terrain, buildings, and weather conditions. The game features a hub area where the player can acquire quests and upgrade their abilities before beginning a mission. Mission structure in Shadow Warrior 2 is less restricted than its predecessor, players can now revisit earlier missions to re-engage past enemies in order to upgrade Wang's skills. New traversal mechanics have been added such as climbing walls and double jumping to allow for more exploration. The level environments are more open and non-linear than in the previous title. In co-op mode, each player experiences the narrative as Lo Wang but sees other players as different anonymous ninjas.

Shadow Warrior 2 can be played in single-player mode or in a new 4-player co-op mode.

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