The main hero named Carl is a dragon slayer who wields a bow and arrow. He has to pass 6 stages and reach the Dragon Castle to retrieve the sword which the hero of the original Dragon Buster, Clovis, used as a weapon.
Each of the stages has its own dragon castle and the last stage has two, including the ultimate castle, where the main villain keeps the legendary sword. To reach the dragon castle on each of 6 maps, the player has to make his way through different locations, more or less free to chose his route. At the start of each map, the player is presented with a screen that shows which useful items can each type of locations contain. Upon entering a location (using the 'SELECT' button) the view changes to an overhead camera.
The player then has two tasks: find a key dropped by monsters and locate an exit (sometimes dropped by monsters too, leading to some levels having multiple exits). Finished locations disappear from the game map, freeing the way for the hero. The game also uses password system.
Unlike the original game, in Dragon Buster II the protagonist can't use any forms of magic, having only his bow to dispose of enemies, most of which usually take about two shots. The game also features interesting mechanics of showing player's hit points - when Carl is damaged, his shirt color gradually changes (blue -> green -> yellow -> red). Health is replenished via special healing pools and power-ups (fairies). It is also replenished at the start of each location.
The world map is comprised of several "instance" dungeons with semi-randomized layouts that the player must find the most efficient path through - once complete, the dungeon vanishes from the map and the player can progress towards the goal.
An interesting mechanic of arrows ricocheting off the walls can result in the hero actually shooting himself with a bow.
The game has a few similarities to the Intellivision game Advanced Dungeons & Dragons (sometimes known as AD&D: Cloudy Mountain, which in turn is based somewhat on Hunt the Wumpus), which also featured a lone hero stalking around a dark maze that lights up with further exploration, using the sounds of distant monsters to figure out where they were lurking.