Alien Breed II: The Horror has Gauntlet-influenced gameplay, similar to the original Alien Breed (and the Alien Breed Special Edition '92), but with many new features. As an Interplanetary Corps soldier, you must visit a remote alien-infested colony and destroy the alien invaders. The game is split over 17 zones, each featuring numerous different aliens. As you go through the game you collect credits, which can be traded for weapons, ammunition and other enhancements through the in-game computers. Keys are collected as you progress, which must be used wisely, as there are many rooms containing bonuses that don’t have to be entered.

It's been nine long years since the first outbreak when Inter Planetary Corps members Johnson and Stone crushed an alien invasion on a remote space research station. For nine years the horror has ceased. Times have changed in many ways - the threat of war no longer hangs like a dark shroud over the Federation colonies, every member aware of the possibility of invasion, everyone afraid, every one now together... safe. The IPC has now grown, strengthened, mainly due to the alliance of the six major races in the Federation colonies. Because of this, the IPC became more respected due to the fact that one race were far more likely to respect the law if one of their own was giving the orders. Problems, it seemed, were long gone and the Federation could look forward to an indefinite peace. But Johnson and Stone, those heroes who witnessed such terror, could not rest easy... Reports of problems at Federation Colony Alpha-Five, home of several hundred crew members, has been transmitting emergency signals for the past few hours. Federation HQ fears the worst, it's almost as if history is repeating itself. The four strongest members of the IPC's marine force are called together, but just two will make the journey to FCA5 - their mission brief unclear. The horror is about to continue.