Technos Japan developed a home version of the game for the Famicom/NES in 1989, which was drastically different from the arcade version. Other home versions were released for the Mega Drive and PC Engine.
The game begins with Marian, the damsel in distress from the first game, being shot to death by Willy, the leader of the Black Warriors. Thus, the objective of the game is to avenge Marian's death instead of rescuing her. Like in the first game, there are a total of four stages, which consists of a heliport, a lumber storehouse, a cornfield and the gang's hideout. All of the enemy characters from the first game are back, with some of them (namely Williams, Roper and Linda, as well as Abobo and his new head swap counterpart Oharra) given makeovers such as different hairstyles or physical features, as well as new attacks such as Williams' ability to run and do cartwheels. There are also three new boss characters: Burnov, an obese wrestler with the ability to make himself disappear; Abore, a sunglass-wearing giant with a powerful shoulder tackle; and Chin Taimei, an Asian martial artist who wields twin kali sticks.
After defeating Willy at the game's final stage, the player must confront an evil clone of their own character who has the same skills, as well as the ability to throw energy beams and possess the main character's body to drain energy. After defeating the evil clone, the game ends with a photograph of Billy and Jimmy with Marian, who sheds a single tear which forms the words "The End". Unlike the first arcade game, there are no ending credits.
Technos Japan's Famicom/NES version of Double Dragon II, much like the NES version of the first game, was more of an adaptation of the game than a direct port. The English-language version of the game was published by Acclaim Entertainment in North America and Europe.
The NES version is notable for featuring cut-scenes (static images and on-screen text) that serve to narrate the progress of the game's plot. The revenge premise remains the same, although the plot was altered. Willy does not appear in the game at all. Instead, a rival martial artist referred to only as the , serves as the final boss after the doppelgängers are defeated—available only in the game's hardest difficulty setting (Supreme Master). According to the Japanese version's instruction manual, he is the master of a martial art style known as , a counterpart of Billy and Jimmy's "Sōsetsuken" style. The ending is also completely different, in which Marian is restored to life after the Mysterious Warrior is defeated.
In contrast to the first NES game, all of the player's techniques are available from the start and the two-player cooperative gameplay has been kept this time, with an alternative mode that has the friendly fire option turned on (in contrast, the one-on-one Vs. Mode introduced in the first NES game was not included in this sequel). Two new special techniques are added to the player's repertoire in addition to the Whirlwind Kick; the Hyper Uppercut and the Flying Knee Kick. The NES version's stage layout is composed of nine missions. While none of the stages are direct reproductions from the arcade game's stages, they share many of the same elements, including background music. Many of these stages don't have actual bosses, but traps which the player must overcome to clear the stage.
Enemy characters from the arcade game include Williams, Roper, Linda, Burnov, Abobo (renamed Bolo in the NES version), Abore (whose design was changed to resemble Oharra), Chin Taimei and the Doppelgängers. Only Oharra, Jeff and Willy are omitted. Two new enemy characters are introduced in addition to the final boss: "Migiude" (the "Right-hand Man") and the "Ninja". The Right-hand Man is a standard thug enemy who relies on hand-to-hand and kick techniques. The Ninja is a sub-boss who relies on tricky attacks and speed. The Ropers now carry incendiary bombs and flails they throw like boomerangs as weapons; the latter is a weapon that cannot be carried by the player.
Gameplay is considerably simplistic in comparison to the console titles, with simple level designs and a very basic repertoire of techniques. Instead of jumping, pressing the A and B buttons simultaneously will make the player kneel, setting up for either, a flying uppercut or a jump kick. The player can also jump and stomp over fallen enemies. Weapons cannot be picked up, even though certain enemies carry weapons such as baseball bats, chains, knives and firearms.
There are ten stages in the game, although the majority of the game takes place in the same subway level. The bosses are a boxer, a chainsaw-wielding Jason Voorhees-lookalike, a ninja, a fat man with a club and Anderson himself. Unlike the first Game Boy game, two-player co-op is possible.
The game switches the order of Mission 4 and 5 and some of the stages are rearranged and expanded. The game also reintroduces elements from the arcade version, such as the return of the steel ball and the shovel. Willy, a character missing from the NES version is present in the game and like in the arcade game, he's the last opponent before the doppelgängers (the Mysterious Warrior is still confronted after them).
The Right-hand Man and the Ninja are the only enemies not included from the NES version (although their sprites were programmed into the game). Bolo appears listed in the manual, but it is Oharra who appears in his place in the actual game.
The game's soundtrack is composed mostly of original music, although a remix of the final boss' theme from the NES version is featured as well as the main Double Dragon theme.
There are also three possible endings, based on the difficulty setting the player finished the game on (with the best ending occurring on Hard).