Need for Speed returns to dirt racing again in this sequel to Need for Speed: V-Rally. The most significant differences are the track editor, improved graphics, and new game modes. There are 84 tracks and the game supports multiplayer with up to four players. This second installment comes with four game modes: an arcade mode for casual rally fans, a championship mode for people who want to compete against other rally cars for a title, a trophy mode, and a time trial mode.

It features 16 different cars in three categories: World Rally Cars (Peugeot 206, Hyundai Coupe, Mitsubishi Lancer, Toyota Corolla, Subaru Impreza, Ford Focus, SEAT Córdoba, Škoda Octavia), 2L kit-cars (Peugeot 306, Citroën Xsara, SEAT Ibiza, Renault Megane, Vauxhall Astra) and 1.6L kit-cars (Citroën Saxo, Peugeot 106, Nissan Micra). A number of bonus cars can be unlocked as well by completing certain modes, such as winning the European or the World Championship.

In the arcade mode you race against three opponents on the race track; whoever reaches the finish line first after a series of laps wins the stage. However, the main goal in a stage is to reach the next checkpoint before the countdown timer stops. Several stages form a level, for which you receive a total of three credits. Every time you fail to reach a checkpoint before the time runs out the race stops and you can use a credit to restart that particular stage. If there are no credits left, the entire level must be restarted. The trophy mode is a bit different. While winning a stage is still done by beating three opponents directly on the race track, to claim the trophy you have to register the best overall result, calculated by summing up all the stages' times.

The championship mode is designed after the FIA World Rally Championship, where drivers compete for points. The European championship is divided into eight rounds, while the World and the Expert championships each have twelve. Every round has two (European, World) or three stages (Expert). This is the only mode where the car gets damaged if handled badly, but it can be repaired at the service park between stages in the following areas: engine, gear box, brakes, steering and suspensions. You only have 30 minutes, so if your car is seriously messed up you will not be able to restore it to a 100% condition for the next stage. At the end of the round the total time for all stages is compared between racers and the first six positions in the standings get a number of points based on their performance (for example the fastest gets 10 points, 2nd place gets 6 points, and so on). Whoever has the most points after all the rounds becomes the new champion.

In the track editor the track is represented by a single line or ribbon. You can edit the curves and change the inclines or declines of each track piece. The only restriction is that trackpieces cannot overlap, so for example you cannot make an 8-shaped track. When playing the track, scenery is added procedurally depending on the curves and inclines and which country is selected. The 84 default tracks make use of the same engine.