Lufia II: Rise of the Sinistrals serves as a prequel to Lufia & the Fortress of Doom, unfolding its events ninety-nine years before. The narrative delves into the origins of the series' antagonists, the Sinistrals, a group of super-humans. Players take on the role of the ancestor of Maxim, the protagonist from the first game, as he embarks on a quest after encountering Iris, a mysterious woman. Maxim seeks other heroes to join forces in preventing the Sinistrals from wreaking havoc and destroying the world.

Like its predecessor, Rise of the Sinistrals follows the Japanese-style turn-based RPG format with an infusion of puzzle elements. The game incorporates intricate puzzles into its dungeon designs, requiring players to use various items and accessories for solving. Additionally, it introduces the "Capsule Monsters" system, allowing summoned monsters to participate in battles. These creatures evolve through the consumption of weapons, armour, or special fruits. Unlike the first game, dungeons in Rise of the Sinistrals lack random battles, with enemies visibly moving on-screen.