The game is set in the southwest United States of America in an alternate version of the year 1982, during the Reagan Administration. The game is less complex than its predecessor, Interstate '76, lacking the detailed armor and weapon management of the original. Its play-style is closer to console-based vehicular combat games like Twisted Metal, with a single health bar as opposed to 76's armor/chassis strength system. The vehicle models have been updated to reflect the change in era, and overall, the game has a New Wave feel, with several hitherto-unreleased Devo songs being on the soundtrack, as opposed to the first game's funk-inspired style.
Interstate '82 features a story-mode like its predecessor, with one new option: the player can exit his vehicle and enter another, adding some strategy to the game's storyline. Another new addition is the ability to skin the new vehicle models.
Six years after Groove Champion and his allies avenged his sister's murder, the former hero has gone missing. The player takes on the role of Taurus, Groove's former partner, as he tries to discover where his friend has gone, uncovering a conspiracy leading all the way to the very top of the American government.
- Taurus, voiced by Greg Eagles
- The protagonist of the game. He lived as a poet in New England with a wife and daughter, who were killed by criminals.
- Groove Champion
- The middle Champion child, Groove is a relic of an earlier era, a burnt-out former vigilante. He must regain his self-confidence if he has any hope of survival.
- Skye Champion
- The youngest Champion, Skye is a punk rocker who convinces Taurus to come out of retirement and help track down Groove.
- Skeeter serves as the mechanic and Greek chorus for the series' heroes. He repairs the player's vehicles between missions and occasionally is the focus of the in-game missions.
Like its predecessors, Interstate '82's arsenal of vehicles is based on real-world cars.