Characters in Bushido Blade also have the ability to run, jump, and climb within the 3D environments. Because battles are not limited to small arenas, the player is encouraged to freely explore during battle. The castle compound which most of the game takes place in acts as a large hub area of interconnected smaller areas including a cherry blossom grove, a moat, and a bridge labyrinth. Some areas, such as the bamboo thicket, allow some interaction.
Despite characters, themes and weapons similar to Samurai cinema set in Feudal Japan Bushido Blade takes place during the modern era. This is shown, for example, when the player reaches the helicopter landing pad phase set in a large city. A fictional, five hundred year old dojo known as Meikyokan lies within this region, and teaches the disciplines of the master Narukagami Shinto. A society of assassins known as Kage also resides within the dojo. Once led by the honorable swordsman Utsusemi, he lost his position to Hanzaki, another skilled member of the dojo, in a fierce battle. Hanzaki gained respect as the Kage leader, until he discovered a cursed sword known as Yugiri. He began to change, disregarding the group's honor and the traditions held by its students.
Bushido Blade 2 expands on some of the aspects of Bushido Blade, while limiting or removing others. The story mode is changed from one large connected level to a series of skirmishes, each set on a different map. Playable characters are chosen from groups which represent two opposing schools of assassins, and they are armed with swords or polearms of varying types.
The fights in Bushido Blade 2 mark the progress of the chosen character who—depending on the character—either fights to regain a legendary sword, or to destroy the opposing school. Levels involve a pattern of fighting several generic ninja followed by a boss, who is one of the playable characters from the opposing school.