There are five large worlds, starting with the hometown, Sandy Bay. The player then moves along to Dino Island, Mars, Arctic, and finally Xalax. There the player challenges Rocket Racer again in a large stadium. After Rocket Racer is defeated, the player will happily hand over the title of the greatest racer in the Lego galaxy. The player moves on by winning 4 races in Sandy Bay, and then collecting gold bricks to advance to the other realms to win their 5 races.
Returning characters from the original Lego Racers are Rocket Racer, Sam Sanister (named Baron Von Barron in the first game) and Johnny Thunder.
There are five levels, or worlds, in Lego Racers 2, each based on a particular theme. In addition to racing cars in the Racers product line, each theme is based on an actual series Lego sets, and includes parts of those sets.
- Sandy Bay: Based on Lego Town sets. It is an island that has a town, construction site, and several beaches as well as a mountain in the center. This world also has portals to the other Lego worlds in it; if you are in the Arctic world and are going to the Mars World, you must go back to Sandy Bay and into the Mars portal. Sandy Bay has four bosses that you have to race before going to any of the other Lego worlds. They are the construction worker, the postman, the fireman, and the policeman (in that order). The races are: Dig-A-Brick, Special Delivery, Hot Stuff and Bobby's Beat. Golden bricks can be found at the beach, at the top of the mountain, and on a ledge by the west beach.
- Dino Island: The next Lego world you visit is based on the Lego Adventurers sets. It is also an island featuring two rivers, a plateau with a volcano, a jungle, a tribal village, ancient ruins, and a few beaches. It constantly rains here. There are Lego dinosaurs running about, which can't hurt you (although they can push you, a setback during races) and always run the same path. The boss for this world is Sam Sinister, who has a fast car. He has an engine super upgrade in the form of a turbo boosted engine. The races are: Tribal Trouble, Dino Dodgems, Cretaceous Canyon, The Lost Race World and Sam Sanisters Slammer. Other racers are Pippen Reed (also in the first) Sir Cuningham, and Cassiopeia (a martian). Golden bricks can be found by the platue, the mountain, and the serpents mouth.
- Mars: The third Lego world is based on the Lego Life on Mars sets. It is a series of valleys in between tall cliff-like mountains. It features a martian mine, martian base, abandoned martian base, crashed space shuttle (which you arrive in according to the mini-movie), and two caves as well as two lava rivers. If you get enough speed in free roam mode, you can get on top of the mountains, but you will respawn if you get too close to the edge of the platform. The boss is Rigel, a martian who races in a mech (a bi-ped robot large enough to sit in) and is not affected by weapons of any kind, although he cannot ramp up speed by running down hills. He has a shield super upgrade in the form of a shield generator. Other racers are Pippen Reed, Cunningham, and Cassiopeia. Golden bricks can be found in the maze, the waterfall (also a shortcut), and Rigel's tribute. Shortcut: the waterfall.
- Arctic: Based on the Arctic sets. It is again an island, with a mountain that you may go inside of, a beached tanker, an ice maze, an iced over lake with several large holes in it, and several bases. It constantly snows here. The boss is the Berg, an ice monster that runs instead of drives. The Berg can turn on a dime and makes icicles sprout from wherever he walks. Although they cannot hurt you, they slow you down tremendously. He has a grip super upgrade in the form of tires. Other racers are Pippen Reed, Cunningham, and Cassiopeia. Golden bricks can be found in the plane, the doctor's office, and the trapped boat. Shortcut: the Berg's cave.
- Xalax: The characters could be purchased from the "Lego Racers" line, but the world does not resemble any particular sets. The world is a dome full of cheering fans and features a volcano in the middle of a lava lake, a jump, a loop, and a tunnel that you may drive upside-down in. Xalax is unique in that for each race the landscape changes. The boss of this world is Rocket Racer, who has a very fast car and all of the upgrades given to the racer. Other racers are the Ramas named Lightor, Warrior, Loopin, Gears, Surfer, Shredder, Scratch, and Spiky. Golden bricks can be found near the tunnel, near the mountain, by the loop, and by a Rampage. Shortcut: go around the loop instead of on it.
Upgrades for your car may be obtained by winning mini games. Each mini game is accessible by driving through a vortex while exploring the Lego worlds. There are two mini games per world, one on an easy level and one on a difficult level.
There are three categories of upgrades available: Grip, which improves how well your car turns and how much your car slides; Power, which controls how fast your car goes and how much climbing power your car has; and Shield, which controls how much damage your car can take before disappearing.
Powerups are various types of weapons that can be used while racing. You obtain a powerup by driving over a white, spinning, glowing Lego brick. A counter appears that cycles through all of the powerups; the one it lands on is the one you get. You may press the "fire" button to stop the counter if you see one that you want. It takes a quick hand, however. Otherwise, the counter will automatically give you a bonus based on your position in the race. Persons in last place will receive the best powerups. Unlike Lego Racers 1, there are no power-enhancing bricks for your powerup.
- Weapons powerups make Lego bricks fly off the receiver's cars. Lose all the bricks and you will be forced to continue on foot, in Lego minifigure form. You have to walk to the nearest pit stop to get your car back.
- The Stealth powerup makes your car invisible to other racers, and you may bump into other racers to obtain the powerup they have. Also, it prevents the Tracking Missile powerup from hitting you. It lasts for around six seconds. Symbol: The gray ninja
- The Drill powerup fires a drill missile in front of your car. The drill behaves like a torpedo, and explodes on impact, eliminating around 50% of the opponents bricks. You can also ride on the drill by holding down the fire button. However, if you ride on it for too long, it will detonate, causing damage to your car. Symbol: A drill
- The Disk powerup fires a flying disc in front of your car. The disc will bounce off any object it hits, except cars, in which case it explodes. You can get another powerup while this powerup is on. It is very powerful, like the drill it eliminates around half of the bricks on your opponents car, but is very hard to use. If you press the look back button you can fire the disc backwards; which can be useful if you are being chased by a Missile, as the Disk can destroy the Missile. Symbol: A disk with blades.
- The Missile powerup fires a heat-seeking missile that you may lock on to any racer. The same with the disc, you can pick up another powerup when this one is on. Occasionally it will explode (by hitting something) before it reaches target. You can also select the target using next target & previous target buttons. It easier to cause damage with than the drill or disc, but it does less damage—around a third of bricks. Symbol: A bloodhound
- The Explosion powerup creates a bubble of expanding energy around your car. When the energy expands to a certain point, it explodes, harming every racer in the vicinity of the bubble except for you. You can charge the shot by holding down the fire button (note that if you keep charging and don't drop it as follows, it WILL damage your own vehicle.) If the fire button is held and then released, the bubble will fall behind the car and explode as described above. If a car runs into a dropped bubble, it will suffer more damage than normal. Damage is variable with this powerup, dependent on how deep you drive into the bubble. Symbol: A storm cloud
- The Whirlwind powerup creates a stationary whirlwind that causes cars to veer away from it. If you hold down the fire button the whirlwind stays attached to your car. If you keep it attached, you will suffer minor damage. You won't be able to pick up any powerups while this is on. It lasts for around six seconds. Symbol: A twister
- The Destructabrick powerup creates a force that first turns the screen yellow for half a second, and then takes 3 layers of bricks off every single car (except for yours) for six seconds. It is very rare, and is the most powerful powerup in the game. Symbol: Flying Lego bricks
In Lego Racers 2, the player has more "freedom", because the player can race or drive freely, and there are other characters that the player can talk to.
The original Lego Racers only has "cars" which are actually karts. However Lego Racers 2 has cars such as trucks, cars with tank-like treads, lorry cars, hover cars, and snow vehicles with skis, as well as a "sail" snow vehicle that you cannot build with the displayed pieces.
Lego Racers 2 also has, like in the original, a car and characters designer. Lego Racers 2 has more bricks but fewer characters to make and edit. However, while in theory this means that more individual racer possibilities exist, the number of "widely used" parts is much lower, and only a few possibilities that exist are commonly used. This also follows over to cars. Additionally, you cannot change your player at any time during adventure (story) mode, further limiting options. You can change your car, however it can only be changed for each of the worlds once.
In the original Lego Racers, there are 5 opponents for the player (6 racers). In Lego Racers 2, it can be chosen up to 11 opponents (12 racers).
In the original Lego Racers, the bosses are a normal racer in a kart. In Lego Racers 2, it can be a non-human or fantasy creature.