LEGO Racers 2 is a kart racing game featuring three modes of play: Story Game, Single Player, and Multiplayer. Players will race on 25 tracks spread evenly across the five worlds of Sandy Bay, Dino Island, Mars, Arctic, and Xalax. The action is viewed from behind the vehicle as players compete against a series of computer opponents for three laps.

To assist them in achieving a first-place finish, players can collect seven power-ups found along the track to use on their opponents. Each hit from a power-up results in the loss of bricks, which slows vehicles down. Players can repair damage by driving over bricks found at various points along each track.

Story Game involves walking around town to speak with its citizens, who will race players for the right to earn Golden Bricks. Golden Bricks enable players to access the remaining four worlds. Players begin by building their character from a selection of head, chest, and leg parts, then creating a name to be placed on a driver's license. As players compete, they'll be able to earn points to improve their vehicle in the areas of engine, shield, and wheels. Progress is automatically saved at the end of each race.

Single Player mode offers players the chance to race in Arcade and Construction games, while Multiplayer mode consists of four games: Arcade, Battle, Capture the Flag, and Construction. Arcade lets one to four players compete on any of the unlocked tracks in a choice of three or five laps. Construction involves racing in one of five arenas to be the first to collect eight pieces of a LEGO statue.

Battle is also played within an arena, and involves using power-ups against as many as three friends to eliminate their vehicles. Capture the Flag is a team event where players work together to retrieve the enemy's flag and return it to base. A successful retrieval earns players one point and the team with the most points at the end of the time limit wins the game. Players can also compete in a Time Trial, as well as unlock four bonus games.