Alone in the Dark 2 is the second instalment in the series and a direct sequel to Alone in the Dark. Like its predecessor, the game uses hybrid 2D–3D graphics and requires players to solve numerous puzzles while fighting zombie pirates along the way. Some enemies can be killed using the wide range of weapons at the player’s disposal, while others must be defeated through trickery. In addition to Edward Carnby, the game also includes a short section in which players control young Grace Saunders. Grace cannot fight, and the sections featuring her focus instead on quick reflexes and wits to evade and outsmart enemies.

It is Christmas of 1924, three months after Alone in the Dark. "Supernatural Private Eye" Edward Carnby and his partner Ted Striker are investigating the kidnapping of young girl Grace Saunders. The trail of clues leads to an old mansion named Hell's Kitchen - the home of infamous gangster One-Eyed Jack and his crew. Edward decides to pick up the trail after he learns of Ted's disappearance. When he soon finds out that Ted has been murdered, he goes deeper on the case.