In The Bard's Tale II: The Destiny Knight you can create your own party of characters or import your party from The Bard's Tale or Ultima III. Character races include: human, elf, dwarf, hobbit, half-elf, half-orc, and gnome. Selectable classes are: warrior, paladin, rogue, bard, hunter, monk, conjurer, magician, sorcerer, wizard, and archmage. The Bard's Tale II: The Destiny Knight is 50 percent larger than The Bard's Tale. It features over 100 different types of monsters, 79 spells, 25 dungeons, and more areas to explore. The game is viewed from a first-person perspective in a small window that takes about a fifth of the screen. To the right of the window is where battles take place. Here, text scrolls up the screen reporting the result of each action.

The story begins with a wizard by the name of Saradon telling your party about the Destiny Wand. This wand was forged at the holy mountain Krontor by the archmage Turin. Serving as a force for armies to rally behind, the wand has been a symbol of peace and prosperity for more than seven hundred years. Now the land is being overrun by evil mercenaries and monsters. It is believed that the Destiny Wand has been broken into seven pieces by the archmage Lagoth Zanta. In order to the save the realm you will need to defeat Lagoth Zanta, find the seven pieces, and reforge the wand. ~ Jonathan Sutyak, All Game Guide