Ace Combat 2 serves as the follow-up to Namco's Air Combat, a combat flight simulator for the PlayStation. In this sequel, the player steps into the shoes of a mercenary pilot, determined to thwart a global terrorist conspiracy. With 30 challenging missions ahead, your triumphs will enable you to acquire weapon upgrades, parts, and various enhancements, mirroring the mechanics of the original game.

Enhanced with crisper visuals and more immersive audio, Ace Combat 2 also boasts an expanded array of planes and customisable options. Additionally, it introduces dual shock support, along with the inclusion of analogue joystick support, enriching the overall gaming experience.

In May of 1997, a number of prominent heads of state in the continent of Usea were away on a diplomatic task with an unknown objective, rumoured to be about the impact of the Ulysses 1994XF04 asteroid in a year's time. During this period, a high-ranking military corps, codenamed "NA-P2700" staged a coup d'état, rapidly establishing their hegemony over the entire continent. Their quick advancement led them to capture several high-importance areas in each sector, as well as a weapon of mass destruction known as an "Extra Powerful Cruise Missile". As a last measure, the pro-government troops, known as Unified Command, call upon the services of the 92nd Special Tactical Fighter Squadron "Scarface", a group of mercenary fighter pilots led by an ace called Scarface One. With hardware and logistics support, the Scarface Squadron sets out to fight the Usean Rebel Forces and liberate Usea.

With the assistance of the Scarface team, the government forces engage in full combat with the URF, slowly reclaiming various territories across the continent. The mercenaries strike various high-importance parts of the rebel forces' infrastructure, such as air bases, oil refineries and naval ports. During their advance, they engage numerous rebel aces, including a group of ace pilots known only as "Z.O.E.". As well, they engage a number of prototype vehicles controlled by the Usean Rebel Force, such as the Dragonet-class submarine and the massive XB-10 "Big Bad Mama" experimental bomber. After retaking most of Usea, Unified Command launches a large-scale invasion operation to gain strategic superiority. In order to confuse the rebels, the mission is divided into two major operations, "Alphaville" and "Bellissima". The operations end with the destruction of many vital URF targets and sites, granting Unified Command the upper hand in the conflict.