Final Fantasy II features gameplay similar to that of its predecessor, Final Fantasy. The player can freely roam an overworld containing several towns and dungeons. A menu-based system allows the player to outfit each character with equipment and up to two—often disposable—items for battle. Magic spells are assigned to the character from the item menu, and certain spells, such as "Cure", can be used outside of battle. The player can also save their progress on the overworld. Weapons, armor, items, and magic spells can be purchased at shops, and townspeople provide useful information for the player's progression through the game. One new feature is the "Word Memory" system: when in conversation with non-player characters (NPCs), the player can "ask" about and "memorize" special keywords or phrases, which can later be repeated to other NPCs to gain more information or unlock new actions. Similarly, there exist a handful of special items that can be shown to NPCs during conversation or used on certain objects, which have the same effect. Characters and monsters are no longer separated into separate windows in the battle screen as they were in Final Fantasy I, and players can see their current and total hit points below the battle. Players can also fight with less than four characters in their party, which was not possible in the first game. Final Fantasy II introduced the chocobo, the signature Final Fantasy mascot, which lets characters ride to a location at great speed without being attacked by enemies. The recurring character Cid was also introduced in II; a character of the same name has appeared in every main-series game since.
On the overworld and within dungeons, (that image was banned because it came from a ROM site) random encounters with enemies can be fought to improve each character's attributes. Unlike the original Final Fantasy, players could not upgrade their characters' classes. The game is also one of the few games in the series to not use experience-based levels. Instead, each character participating in battle develops depending on what actions they take. For instance, characters who use a particular type of weapon frequently will become more adept at wielding a weapon of that type, and will also increase in physical strength and accuracy. Attributes include hit points, magic points, magic power, stamina, strength, spirit, agility, intelligence, and evasion. Players can also increase their ability to wield certain types of weapon, and repeated use in combat causes the ability to level up. Hit points (HP) and magic points (MP) increase with their use; a character who takes a heavy amount of damage in a battle might earn an increase in maximum HP, while a character who uses a lot of MP during battle might increase their maximum MP. This experience system had several unintended consequences that allowed characters to gain much more experience than intended, such as players having their characters attack each other and repeatedly cast spells, thus causing their HP and abilities to grow extensively. Final Fantasy II uses the same turn-based battle system seen in the original Final Fantasy, with battle parties consisting of up to four characters at a time. The game introduces a "back row" in battle, within which characters or enemies are immune to most physical attacks, but can be harmed with bows and magical attacks.