Like its predecessor, Mat Hoffman's Pro BMX 2 uses the basic game structure carried over from Activision's Tony Hawk's Pro Skater series of video games. The goal of the game is to successfully perform and combine different tricks on a BMX bike, with successful executions adding to the player's score. The point value of the trick is based on time maintained, degrees rotated, number of tricks performed in sequence, and the number of times the tricks have been used (the more often a trick is used, the less it's worth). Successful tricks also add to the player's special meter, which, once full, allows for the execution of "signature moves" which are worth more than normal tricks. Grinds, lip tricks, and manuals (wheelies) are included in the game to help the player link tricks together into combos. Bails (falling off the bike due to poor landing) cause for no points to be awarded for the attempted trick or combo, and resets the special bar to empty.

Enhancements over the previous installment include improved graphics, new tricks (including flatland tricks and a "trick tweaking system", similar to the trick modifier featured in Dave Mirra Freestyle BMX), a balance meter for grind and lip tricks, more riders, a longer career mode, a larger soundtrack, and larger, more interactive environments.

The player can choose from eleven different professional BMX riders, with each rider having their own unique stats, bikes, and trick sets. Eight levels are included in the game, set in and around various cities across the United States. The Xbox version features a total of twelve professional BMX riders and nine levels: rider Chad Kagy and the London level are exclusive to this release.