Many of the enemy characters from the first game return for this one, but with altered appearances and new attacks, and the variety of weapons they use has been altered. The player must defeat a boss at the end of each mission, as well as one or more sub-bosses along the way. Similar to Double Dragon, the game is divided into four areas or 'missions': a heliport, a lumber storehouse, a farm, and the gang's new hideout. A few new moves are added as well, including a Hurricane Kick. Pressing the attack button of the player's current direction will do a standard series of punches, while pressing the opposite attack button will perform a back kick. The biggest change in the game's controls are in the replacement of the original's punch and kick buttons with two directional-based attack buttons (Left Attack and Right Attack) similar to Renegade.

The arcade version of the game is essentially an improved version of the original title. Once again, the players assume the role of brothers Billy and Jimmy Lee, who are now tasked with the duty of avenging Marian's death. The arcade version of Double Dragon II: The Revenge begins with Marian, the damsel in distress from the original Double Dragon, being shot to death by the leader of the Black Warriors.

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