The gameplay is similar to the original Stronghold, the major difference being that the game is set in the Middle East. As a consequence, farms can only be built on oasis grass, which leads to rivalry among players for limited farmland and resources. The game adds new AI opponents (the number depending on the version of the game) and several new Arabian units purchasable from a mercenary post. The colour of the player's units have also been changed from blue to red in order to match the colours of the Knights Templar. Other than farms there are other resources such as iron ore, quarry (for stone), and marshes (for oil).

These resources are deposited on the stockpile and the player can choose to either sell or use them for defense purposes. There are two ways to build an army either make the weapons and then spend a little gold to turn peasants into soldiers, or turn them directly into soldiers using more gold via the mercenary post. There are historical chapters (mostly fictionalized) which are to be completed using the resources given to the player at the start of the missions. Along with that there are 50 levels designed with increasing difficulty. Each level has one or more Kings who the player has to defeat and defend his/her kingdom from. There is an option of 3 chickens at the start of the game which the player can use to skip a particular level. There are 30 additional levels added by the developers in the form of an additional Crusade Trail. The design of these mirrors the original 50 levels with the difficulty raising as the player progresses through the levels.

The game contains several different characters, available to be selected as allies and enemies. The opponents from the original game make a return, as well as new Arabian lords and crusaders being available. One unique aspect of the game is that the characters have individual binks (small short videos) by which they communicate with the player, asking for goods or help if allied with them or, if they are the players' enemy, taunting them when attacking or expressing worry when under siege. These videos were absent for Stronghold 2 but returned, in a new form for Stronghold Crusader II. These vary in terms of difficulty and tactics. There are five relatively weak European lords, the Rat, detail of army is only spearmen and archers, the Snake ,detail of army is slaves,archers,spearmen and ground catapult ,King Phillip, the Marshal and the Abbot.

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