Basic gameplay is an improvement on Sonic Advance, with much of the earlier features intact. Compared to its predecessor, Sonic Advance 2 contains more and larger levels, the overall difficulty is higher making it a more challenging game, an enhanced sound track, and offers better control over the playable characters. Most levels start in a corner of a map and require to move uphill or downhill.

All characters can now perform various stunts when flying through the air and not curled in a ball (i.e. after being launched from a spring or similar). These are activated by holding a direction on the D-pad and pressing the R button. Some of these stunts can be used to destroy enemies.

Another new feature is shattering the sound barrier. If a character runs as fast as possible for a period of time without stopping or slowing down, they will shatter the sound barrier and leave a trail of afterimages behind them. While in shattering the sound barrier, it is possible to run over water, and the attack used with the B button becomes more powerful. The delay before reaching shattering can be decreased somewhat by collecting rings. Certain objects in the level (red booster wheels, for instance) will instantly force the character into the state. This also shows that Sonic, Tails, Knuckles, Cream, Amy, and eventually Blaze, can run faster than the speed of sound. Although this is mixed up and scrambled in later games.

In each act, there are seven Special Rings. Collecting all seven of these and completing the Act, without dying, will take the player to a Special Stage, where a player can win a Chaos Emerald. The stage accessed and emerald obtained both depend on which zone the player was in when they accessed the stage. Unlike Sonic Advance, emeralds are not shared between characters.

All bosses in this game, except for the final boss, take place while running along a horizontally wrapping area, akin to the Mushroom Hill Zone boss in Sonic and Knuckles. Rings will appear in groups of three. This format makes any attack other than jumping and Sonic's insta-shield (and Cream's ability to command Cheese to attack, of course) completely useless, and once the player has lost their rings it is difficult to regain them as they fly off the left side of the screen; both of these facts have led to the bosses being heavily criticized by fans. Spin-dashing, however, IS possible, but extremely difficult to do in real time: one must go to the right side of the screen, then suddenly brake, and very quickly stop braking, duck and spindash before reaching the left side of the screen; this trick has been heavily used in tool-assisted speedruns.