Players can play fully solo with only one character in their party or with up to three others. The game is described as being set in a “huge open world with hours of hidden content”.Several pre-made characters with backstories are available to the player. Players are also able to create a custom character and choose their stats, race, gender, and origin story at the start of the game. They can recruit up to three companions to assist them. Companions in your party are fully playable, and will potentially have different interactions with the environment and NPCs than the player character. Players are able to split up and individually control their party members, leading to potentially complex battle tactics, as well as excellent role-playing opportunities. The game features both on-line and local multiplayer modes, both competitive and cooperative. A skill crafting system allows players to mix and change their skills. The game also features a competitive multiplayer mode, where players are divided into two different teams and fight against each other in an arena map.
The game is set on the fantasy world of Rivellon, centuries after the events of the first game. Living beings on Rivellon have a form of energy known as Source, and individuals called Sourcerers can manipulate Source to cast spells or enhance their combat abilities. The Seven Gods of Rivellon had given up a portion of their collective Source power and infused it into a person, Lucian, who became what is known as the Divine, whose role is to use his powers to hold back the Void. However, Lucian died before the start of the game, which weakened the Veil between the Void and Rivellon, and monstrous creatures of the Void known as Voidwoken are beginning to invade Rivellon. Voidwoken are drawn to the use of Source, which has led to the persecution of Sourcerers, primarily by an organization called the Divine Order, whose Magisters enforce their will. The Void is also home to a dark deity known as the God King. At the start of the game, the player character is a Sourcerer who is captured by the Divine Order and sent to an island fortress known as Fort Joy. Fort Joy is a prison for Sourcerers, ostensibly to cure them of their Source powers, but in actuality "purging" the Sourcerers to turn them into mindless husks. During the journey to Fort Joy, a gigantic Kraken Voidwoken attacks and sinks the ship, but the player character is saved from drowning by a mysterious voice, who calls the player "Godwoken".
Awakening on the shores of Fort Joy, the Godwoken witnesses the brutal regime of the Divine Order on the island, led by Lucian's son Bishop Alexandar and his chief enforcer Dallis. The Godwoken also learns of a tyrannical Sourcerer king called Braccus Rex, who had lived and died around 1000 years ago. The Godwoken escapes from the fortress and visits the Hall of Echoes, the realm of the Seven Gods, where the Godwoken encounters one of the Seven. The God explains that he or she was the mysterious voice that rescued the Godwoken from drowning, and that the Godwoken must become the next Divine. This is because the weakened Veil has allowed the Void to enter Rivellon, and the Gods' powers are somehow being drained. Therefore, the ascension of a new Divine is essential to hold back the Void.
The Godwoken escapes from The island, but Dallis intercepts the Godwoken during their journey, aided by a mysterious hooded figure called Vredeman, who uses powerful Source spells. However, the Godwoken manages to get away.
The Godwoken sails to the island of Reaper's Coast, which is also under Divine Order control. There, the Godwoken gradually expands their Source powers until they achieve mastery of Source. The Godwoken also encounters their God again, who instructs the Godwoken to the Well of Ascension, where the Godwoken will be able to absorb enough Source to become Divine. During their time on Reaper's Coast, the Godwoken also learns that Dallis and the Magisters have excavated the Aeteran, a powerful artifact with an infinite capacity for purging Source. Additionally, the Godwoken encounters an immortal being called Aeterna. Aeterna claims that she is a member of a race known as Eternals, who were the original denizens of Rivellon. The Seven Gods were themselves Eternals, but they craved the power to rule as gods. To accomplish this, the Seven betrayed the other Eternals and banished them to the Void, and then created the mortal races of Rivellon in their own likeness, from whom the Gods would be able to drain large amounts of Source and become supremely powerful.
The Godwoken sails to the Nameless Isle where the Well of Ascension is located. There, they learn that the Eternals in the Void have become the Voidwoken, and that the king of the Eternals before their banishment is the deity now known as the God King. Furthermore, the God King and the Voidwoken intend to return to Rivellon and reclaim their rightful home. The Godwoken makes their way to the Well, but before they can absorb the Source within and become Divine, Dallis appears with the Aeteran and destroys the Well. The Godwoken's failure to become Divine enrages their God, who attacks the Godwoken in desperation, but the Godwoken defeats their God.
The Godwoken pursues Dallis to the Tomb of Lucian, located in the harbor city of Arx, but finds that Lucian is alive in it. Lucian reveals that he faked his death and hid in his tomb, and it is he, and not the Void, that has been draining Source from the Seven. Lucian intends to purge all Source from Rivellon and use it to permanently seal the Veil, which will finally bring peace to the world. Dallis, who is secretly an Eternal, has been aiding Lucian. To this end, she has resurrected Braccus Rex, who has been serving Dallis under the name of Vredeman.
Braccus Rex breaks free of Dallis's control and summons the Kraken to attack the Godwoken, Lucian, and Dallis. After Braccus Rex is defeated, the Godwoken can choose from several endings, such as ascending to become the next Divine, purging all Source from Rivellon, releasing the Source and the powers of Divinity to the world, or allowing the God King to return to Rivellon and restoring the land to Eternal rule.