He Ran is a young man who studies martial arts by an old master, together with the lovely girl Jiang Ruhong. One day, the master receives a message from a village chief, saying that there is trouble in the Yexun mountain area. Bandits attack innocent people, and something must be done to stop that. The master, He Ran, and Jiang Ruhong go to the Yexun mountain area to put an end to bandit raids. This trip is just the beginning of a long adventure…
The sequel to Xuanyuan Jian is also set in old China; though the three heroes bear different names, the story is set up as a direct continuation of the previous game’s unfinished tale. Graphically, the second game departs from the “Japanese” look of its predecessor: its hand-drawn backgrounds and character portraits and sprites have their own distinct Chinese flavor. Navigation over world map, in towns, and in dungeons is done from top-down perspective, while the turn-based battles utilize first-person view. There are now backgrounds for battles, and attacks are animated (showing the party members perform an attack from over-the-shoulder view).
Xuanyuan Jian 2 introduces new features to the rather basic gameplay system of its predecessor, which have been since used in most installments of the series. The “Spirit Pot” system allows the player to capture monsters during battles and fuse them with other monsters or items to create more powerful types. The monsters can be then used during battles as items, aiding the player-controlled party. A stamina bar has been added next to the regular magic points, allowing the use of special stamina-based techniques.