Luminous Arc 2 is the sequel to the original Luminous Arc, but takes place in what appears to be a parallel universe. The game is still an isometric-grid based-strategy-RPG. In this game, Roland can get "engaged" with any of the elemental Witches once he forms a bond with them. Getting engaged in battle gives Roland access to all their spells and stat boosts specific to the elemental affinity of the Witch he is engaged to.

For the past four millennia, the world had been at peace. The Kingdom of Carnava led the people with a fair and just hand, and the Magic Kingdom ensured that magic was not used for evil purposes. Life was good until sixteen years ago, when an aggressive new lifeform started appearing. These creatures were known as Beast Fiends, and they began ravaging the land, leaving death and destruction in their wake. Master Mattias, leader of the Magic Association, and the greatest magic user the world has seen in thousands of years, took the forbidden demon blade, Rega, and stopped the Beast Fiends at their source... but died in the process.

Now, the Beast Fiends have begun to reappear, but unlike the previous incident, nobody has been able to discern a pattern or reason to their appearance. In addition, Fatima, a powerful Witch known as the Shadow Frost Witch has begun to wreak havoc upon the Magic Association by openly attacking the leaders. In the middle of all this stumbles Roland, a knight in training. An accident in Carnava's Magical Technology lab imbues him with the power to use magic and he is sent off to the Magic Association to learn how to properly use his newfound abilities. Unbeknownst to him, the fate of all Carnava will hinge upon him.

Luminous Arc 2 boasts multiple endings, depending on which of the two main female characters Roland has a better relationship with at the end of the game. As added fanservice, cameos by a few of the characters from the original Luminous Arc are included, and secret missions include fighting for control over usage of hot springs. Winning these battles will result in the player getting hot spring intermission sequences with whichever character they choose. The intermission system, and the bizarre Kopin interludes from the first game are also holdovers from the first game.