After escaping from a dangerous planet in the original Pikmin, Captain Olimar has made it home safely but only to discover that his employer, Hocotate Freight, is bankrupt. In order to save the company, Olimar and his assistant Louie now return to the planet where the Pikmin live, a planet closely resembling the Earth. Their goal is to locate and bring back as many treasures as possible, which can then be sold to bring Hocotate Freight out of bankruptcy.

Gameplay is similar to the previous game. You control Olimar or Louie, however you are not able to accomplish much of anything by yourself. To help out, you can command the Pikmin, a plant like creature that lives on this planet. The Pikmin are able to perform a variety of tasks, such as moving obstacles, engaging in battle, and dragging treasures back to your ship. There are several different varieties of Pikmin, each type having specific abilities and characteristics (red Pikmin are immune to fire, blue Pikmin can swim, yellow Pikmin can be thrown far, purple Pikmin are stronger, and white Pikmin are fast and poisonous to foes if eaten by these). You can command up to 100 Pikmin at a time, and will need to take advantage of each type of Pikmin unique abilities in order to recover treasures and get past the many deadly creatures as well as obstacles.

A two-player game mode is also included along with the story mode. In this game mode one player controls red Pikmin, the other controls blue. The goal is to either be the first player to collect four marbles even by stealing them from your opponent.