The gameplay is very similar to the original Crazy Taxi, and centers around picking people up at destinations which are highlighted with colored rings, and dropping them off at stated destinations.

Unlike its predecessor, Crazy Taxi 2 allows the player to carry multiple passengers. The game also saw the introduction of the "Crazy Hop" feature, which allows the player to jump over certain surfaces to save time, as they ferry taxi passengers around the locations. By performing moves such as the "Crazy Hop" and the "Crazy Dash", the driver accumulates tips from their passengers, which increases the total score.

Each customer will have a different color appear above him or her with money sign according to the color. Green means long distance, yellow means mid range and red means short distance. The longer the distance, the more money the player can earn. There is a time limit when driving each customer to the destination. If the time limit expires before reaching the destination, the customer will jump out of the cab. The game has no restriction on players aside from a time limit, allowing players to drive as fast and as recklessly as they wish.

This sequel includes a modified soundtrack with rock bands The Offspring and Methods of Mayhem. The game also has some online modes in the form of a scoreboard, and replay-sharing. There are some unlockable items and maps for which players need to beat mini games to unlock.