Christmas Eve, 2200.

The Delta Foundation has just finished the development of a cyborg unit which represents a new generation of fighting robots. They want to sell it to the government's department of defense as it would pose a threat to the security of the nation if it is sold to a foreign country. They have asked the president, who is actually an alien from outer space, to consider their offer and respond in one week. The government takes this matter very seriously, and assigns Nova to destroy the Delta Foundation. Unfortunately, the government cannot be involved in the event that something might happen to him.

Power Blade 2 has six stages which involves you running through the level, while killing off enemies and avoiding hazards. At the start, you can choose which stage to start at, but unlike Power Blade, once you have chosen a stage, you can't exit and choose another one until you have completed the current one first. Nearly each stage involves you using your wits, as you dodge spikes, jumping towards the top of the screen to avoid fire, and getting fans to lift you onto platforms. You can also slide your way through tight spots, as long as you slide in the right place.

At the end of each stage, you fight a different boss. However, in the end, you must fight all the bosses you fought before before you get to fight the alien leader.