Grandia 2 is a 3D RPG, viewed from a top-down perspective for most of the game and a 3rd person view during battle. Controlling Ryudo, the player will explore various locations, locating townspeople and objects within an area to interact with. Towns and dungeons are displayed in the same manner, though dungeons tend to be mazes filled with monsters and towns tend to be friendly areas filled instead with conversation and shops. Any monsters present in these areas will be shown walking around. Walking over to and touching the monster in any way will activate a battle. If the monster notices the player approaching it is considered a normal battle, if Ryudo is able to approach undetected the player's party will gain the initiative in battle, if any party member besides Ryudo is approached by the enemy then the party loses initiative.

Ryudo is a mercenary, known as a Geohound, and is hired by the Church of Granas to escort Elena, a Songstress of Granas, to Garmia Tower for a ceremony. Upon arrival, he is asked to wait while they perform the ritual. However, he hears a scream and rushes up to the top floor. Seeing everyone dead and Elena with a pair of wings, he rescues her and both return to Carbo village. Back in the village, Ryudo is asked by the priest to escort Elena to St. Heim Papal State to seek Pope Zera to help cleanse Elena of the Wings of Valmar, one of several pieces of Valmar, that now possess her. Before he can turn the job down, the village is attacked by a mysterious winged woman, who engages and defeats Ryudo in battle. She introduces herself as Millennia and disappears. The next morning, Ryudo accepts the job and departs for St. Heim with Elena. In the town of Agear, Millennia appears again, this time more friendly, and teams up with Ryudo. She accidentally reveals herself as the Wings of Valmar and that she possesses Elena, sharing her body as a separate being. The group, eventually joined by Roan and the beast man Mareg, encounters more pieces of Valmar, which Millenia absorbs after defeating them. When the group arrives at St. Heim Papal State, Elena meets with Pope Zera, who wishes to speak with Ryudo. The Pope requests that he find the legendary Granasaber, a weapon wielded by Granas which was used to defeat Valmar. Ryudo reluctantly agrees, and the group travels to Roan's hometown of Cyrum. Upon arrival, the group rests at the inn as Roan departs. The next morning, it is revealed that Roan is the prince, and that the people of Cyrum once assisted Valmar against Granas in the ancient war. The party enters the castle and finds the Gate of Darkness open and discover an ancient factory underneath the castle. They encounter the Claws of Valmar and, later, Melfice back in the castle. Melfice is Ryudo's brother and the man Mareg seeks, who flees after defeating the group in battle, telling Ryudo to face him at home. Roan is crowned king and chooses to stay in Cyrum, to encourage its people that the past does not predict their future. Tio, the being possessed by the Claws and an Automata, joins the group after being rescued. The party arrives at the village of Garlan, Ryudo's hometown, by boat, and Ryudo is immediately chastised for returning and commanded to leave. He reveals that Melfice has returned and he plans to kill him to end his torment of the world. At the inn, a disguised Skye reveals Ryudo's history to Elena. Garlan used to be a village of swordsmen, with Melfice being the best. However, one night, during a storm, the idol in the hills grew restless, so the villagers sent Reena, Melfice's fiancé, to pray at the altar. She didn't return, and Melfice investigated, being secretly followed by Ryudo. In the shrine, Ryudo witnessed Melfice murder Reena. Ryudo later fled from town and stayed away for three years, causing the villagers to believe he abandoned them, hence their contempt. In the morning, the group travels up the mountain to confront Melfice. At its peak, they defeat Melfice, who afterwards reconciles with Ryudo and informs the group of the Granasaber's location before dying. While Ryudo grieves, the Horns possess him, causing him to lose consciousness. Back at the Inn, Elena asks Millenia for help, but she initially refuses. However, she relents and uses her powers to seal the Horns inside of Ryudo, who then awakens with a renewed sense of purpose. But Elena questions Granas, as it was Valmar who saved Ryudo. The group travels to Nannan, Mareg's hometown, near the location of the Granasaber. In the village, Mareg is praised for his successful mission and the group are informed of the Granasaber's whereabouts: within a giant cyclone to the east. The group travels there and deactivates the artificial storm, revealing the Granasaber. However, Selene, the High Priestess, appears and sacrifices a Cathedral Knight to revive the Body of Valmar around the Granasaber, but the group enters the body and destroys it. Tio reveals the Granasaber to be a ship, teleporting the group inside and guiding the giant sword back to St. Heim. The "Day of Darkness" arrives, and the group witnesses the Cathedral Knights slaughtering townsfolk, and destroy the Knights. Elena reveals her true mission: to absorb the pieces of Valmar so they could be destroyed by the Granasaber. In the Cathedral, Selene transforms into the Heart of Valmar and the group destroys it. They catch up to Zera, who reveals the truth: that Valmar was victorious in the battle against Granas, who was killed. He declares his intentions of reviving Valmar using Elena, and abducts her to the Moon of Valmar. The group uses the Granasaber to reach the moon and save Elena. A wounded Mareg later sacrifices himself to allow the group to escape from the moon. Crashing near Cyrum, which is now besieged by monsters from the moon, the group rejoins with Roan and defends the town. Soon, Valmar's Moon crashes into the Granas Cathedral and the new Valmar emerges. Unfortunately, the group finds itself without the means to defeat him. Roan suggests traveling to the nearby Birthplace of the Gods for answers, which reveals much about the ancient war and the origins of both gods. Meeting another Automata named Elmo, Ryudo chooses to confront the Horns within and is beset by many trials. However, he overcomes his fears and insecurities and is granted the true Granasaber. The party challenges Valmar and enters his body. Inside, they are confronted by Zera, who attacks them before sending a false Millenia after them. Ryudo's party is victorious, and the true Millenia, now separated from Elena, joins them. Zera divides the group and launches a final attack against Ryudo, Elena, and Millenia. They defeat him and destroy Valmar for good, restoring peace to the world. The ending shows the different characters one year after Valmar's defeat. Roan is still king and embarks on a journey to find his friends. Tio has become a nurse in Cyrum, Millenia is a teacher, and Elena tours the world as a singer in a troupe. Elsewhere, Ryudo lays the Granasaber to rest and makes his return to the world.