The game goes between the Plastic World and the Real World, in which Sarge is the size of a typical plastic Army Man soldier. It features many interactive effects, such as breakable wine bottles, bustable soda cans and music that spikes in intensity when enemies attack.
Sarge's Heroes 2 is very similar to its predecessor in terms of graphics and gameplay, however, in terms of perfomance, the game was greatly improved in comparison to Sarge's Heroes but at the cost of longer and/or non-linear levels.
One of the many additions was the incursion of Vikki as an Playable character during some campaign missions.
Unlike the first game, the Heroes have a major role in the story as Sarge or Vikki team up with one member of the Company at least once during the campaign.
One of the many changes from Sarge's Heroes was the soundtrack that abandoned its militaristic and heroic tone in favor of more rock-oriented music.
Army Men: Sarge's Heroes 2 starts where Army Men: Sarge's Heroes left off. It is announced that the capture of Field Marshal Tannenburg will end the war since General Plastro disappeared, it is suggested that he has become a victim of plastrification and has been trapped in the real world. The game introduces Bridgette Bleu, a spy from the Blue Nation that developed a serum that reverses plastrification.
The game starts with Sarge and the Bravo Company destroying a portal in a real-world dinner as Bridgette Bleu watches from afar, after returning to the Plastic World, Grimm informs Sarge and Vikki about the Anti-Plastrification serum and the threat it represents to the Green Nation, Sarge and Vikki are sent to destroy the cargo train containing the Serum and the portal the Tans use to transport it, they succeeded and Sarge and Vikki separates, Sarge goes to the Freezer and Vikki to the Graveyard, on the Freezer, Sarge manages to destroy the Serum hidden inside Soda cans and Vikki, with the assistance of Hoover, manages to reach Dr. Madd's castle but instead of waiting for Sarge, she enters the Castle and ends up captured by Zombies, eventually Sarge manages to rescue her and destroy the Serum inside the castle.
On their return, Grimm informs the Duo that they have found the location of Tannenburg's headquarters with the help of a Blue Spy which is revealed to be Bridgette Bleu, who proclaims to be working with the Blue Resistance.
The Green Army launches an assault on the Tan's Headquarters and Tannenburg is captured, during the peace treaty Plastro invades the base through a portal with his new army and captures Vikki, seeing that the base is lost, Grimm and Sarge escape. They reunite with Bravo Company in a far away outpost and are sent to capture the Tan's Bedroom Command, on their way, they discover that Bridgette was working for Plastro and they set up for attacking the bed to capture her. Sarge, with the help of Thick, manages to capture her, however, Shrap and Grimm come to inform Sarge and Bridgette that the Blue Nation is under attack by Tan Forces, Sarge and Riff move to the Blue Nation to help the losing-Blue forces and manage to push the Tans out of the Nation, Bridgette, heartbroken to see her nation in ruins, reveals the location of Plastro's headquarters in the Toy Store.
Meanwhile at the Toy Store, Plastro, having Vikki tied up, claims that since Bridgette left him, she will be his wife and sends his soldiers to keep her guarded in a gum dispenser while he plans to use Rockets to destroy all the Nations that oppose the Tan Republic.
Sarge and the Bravo Company Commandoes manage to reach the Toy Store and they separate with Sarge attempting to rescue Vikki and Bridgette and the Bravo Company attempting to capture Plastro, Sarge manages to rescue Vikki and she tells Sarge about the Rockets and both hurry to stop them, meanwhile, Bridgette betrays Bravo Company by sending them into traps so the Tans could capture them to regain Plastro's trust.
After destroying various trains containing the Rockets, both see Plastro taking Bridgette to the Billiard Table and both separate with Sarge going after Plastro and Vikki after the remaining Rockets, she manages to destroy the Rockets as Sarge reaches the Billiard Table only to see Plastro tying Bridgette to a dynamite stick and taunting him into rescuing her, after fighting his way through the table, he unties Bridgette only to be betrayed by her as she uses the Plastrification Serum on Sarge, paralazing him.
At the Pinball table, Plastro celebrates his victory by torturing Sarge, unable to handle Sarge being tortured, Bridgette orders some of her loyal soldiers to activate a vending machine to cause noise so the Green Army could find the table and use the Anti-Plastrification serum on Sarge, freeing him, he eventually frees Bravo Company and corners both Plastro and Bridgette, she attempts to persuade Sarge into sparing her only to be hit in the face by Vikki, causing both to fight while Plastro activates an sleeping Toy Robot to kill the heroes but they are saved when a green helicopter (piloted by William Blade) appears and uses the serum to give life to another Toy Robot, both Robots fight until both fall off the table, Plastro also attempts to escape only faint at Sarge's attempted act of violence on him.
Upon returning, Plastro is forced to order his forces out of the Green Nation and Vikki ask Sarge about Bridgette and if they will see again with Sarge replying that they will someday.
On the last moments of the Campaign, Bridgette, in her hideout, promises that she will make Sarge hers someday.
- Sometimes when playing as Vikki, she will grunt the same way Sarge does in a male voice when she falls.
- A common glitch is when playing as Sarge, Vikki will start to shoot you and never stops.
- In the game manual, it mentions Sarge's father being melted by the Tan which differs from the game manual for Sarge's Heroes.
- Unlike the first game, the M16 has infinite ammo but its firerate was nerfed.