Torchlight II features randomly generated dungeons for the player to explore, and numerous types of monsters to fight for experience and loot. Players are able to customize character appearance with choice of sex, face, hair style and hair color.
The game features four playable character classes. Each class has 3 skill trees to choose from which enable customization within each class.
Years after the end of the original Torchlight, The Alchemist (playable character in the first game) becomes corrupted by the Ember Blight coming from the Heart of Ordrak, the evil being who had been the source of the corruption under the town of Torchlight, and then destroys the town. The player character takes on a quest to stop this villain, who is using Ordrak's power to disturb the balance between the world's six elements.
As the game progresses, the player treks across large geographical areas, corresponding to three "acts" of the story and an epilogue. Act I, Wake of the Alchemist, is set in the mountainous Estherian Steppes, and Act II takes the player to a desert known as the Mana Wastes, and Act III takes place in Grunnheim, a haunted forest that contains the ruins of an ancient dwarven civilization. An Imperial Camp serves as the player's town.