Key new technology features include a tenfold boost in character poly counts and a hundredfold increase for environments, realistic outdoor scenery generated by a new large scale terrain system, procedural character animations and blending using a new skeletal animation system with component level controllers, and a particle system that allows the Unreal II project team to realistically model fire, smoke, cloth, hair, weather effects, and breaking glass.

Other technical improvements include upgraded NPC AI, a real-time dialog system for communicating with NPCs, texture compression, alpha blending, distance fog, a new version of the Unreal level editor, advanced particle physics with forces and particle collisions, and per-poly collision detection for characters.