The gameplay is much similar to that of its predecessor, in which the player is free to roam the game world at will without having to focus on the game's storyline, much similar to that of other sandbox style action games, like the Grand Theft Auto series of video games.
Several new additions and improvements to the game were explained by the lead designer of the game, Peter Johansson. The AI has been rewritten for Just Cause 2. It now uses a planning system which enables enemies to do all sorts of new things. For example, the enemies will use the environment to their advantage, taking cover behind objects and adapting dynamically to the objects around them. The hybrid aiming system is also a new feature that helps the player to quickly aim at enemies while leaving the player in full control over the crosshair, as such, the player is rewarded for skillful manual aiming. It also enables you to pinpoint specific limbs manually and have varied crippling effects on the enemy. Just Cause 2 also has an adaptive difficulty system, gradually scaling the difficulty as the player does more in the game.
The game takes place on the fictional island of Panau, situated in the Malay Archipelago. It is geographically similar to both New Zealand and Hawaii.