Actraiser 2 begins with the universe overrun with evil, with the Master battling with Tanzra. Tanzra, once the Masters servant, led a rebellion against him, but lost and was banished from Heaven.

Ripped and torn, the slain body of Tanzra fell to the underworld. Feeding on the intense hatred each held for the Master, Tanzras seven deadly sins and their minions combined their power to raise the spirit of their mighty leader. Tanzra, now vowing revenge for his defeat by The Master, unleashed these demons upon the world. The player in this game assumes the role of the Master, aided by an angel associate, known as Crystalis.