Waterloo II is a 2-player historical strategy wargame.

Character movement and commands are placed via text, and each player takes turns inputting 5 commands for their forces, followed by their opponent. Each set of commands causes 6 hours of gameplay to pass. Weather, terrain, and time of day affects troop movement. The player controls infantry, cavalry, artillery, supply trains, and other troop movements. Troops must regularly rest, and night-time movement saps fighting men's strength. Each force is controlled by a general, and if they are lost, that team's troops leave the field.

The ultimate goal of French forces is to capture Brussels, which would force Prussian and Russian forces into retreat or capture and hold Calais, which would send the British into retreat. British forces will attempt to gain Paris, which puts Russian and Prussian forces on the field, or kill Napoleon, causing a rout of French forces. The battle continues until one side has lost all troops.

Based upon the battle of Waterloo, the player controls British and Prussian forces against Napoleon's French forces. Played from an overhead perspective on a large map of continental Western Europe, the player's forces are displayed as small tiles on the screen. In the Atari version, the player has a large smoothly scrolling map, while the Apple II version breaks the map into 16 individual segments, which can be viewed separately.