Colin McRae Rally 2.0 on the Game Boy Advance adapts the gameplay of the PC/console title to the handheld's capabilities.

The game features five licensed cars (Ford Focus, Mitsubishi Lancer, Toyota Corolla, Subaru Impreza, Ford Puma) and tracks in six different countries (Finland, France, Sweden, Australia, Kenya, United Kingdom).

The game's main rally mode takes the player through a championship, with each of the six countries' rally tracks consisting of six stages each. The game takes the simulation approach, with the player being able to adjust suspension, gearbox, steering, tyres and more to fit driving style and road conditions. Damage acquired during a race must be repaired between stages at the expense of time. Besides driving the full championship, it is also possible to practice single rallies and even single stages - a time trial mode for single stages is also available. Tracks not available to be selected from the beginning must be unlocked by winning the championship first.

Besides rally mode, the game also offers arcade mode, which features six tracks for conventional circuit racing. The circuits can be driven as time trials, single races or a championship. This mode also supports multiplayer via the link cable, only requiring a single cartridge.

During racing, the track is displayed via a Mode-7-style scaling/rotating bitmap engine, with the cars rendered as texture-mapped polygons. During rally races, the game features a co-driver calling out road features ahead via digitized speech, which is provided by Colin McRae's actual co-driver Nicky Grist.