The Sims 2 for PlayStation Portable delivers a unique third-person experience that blends life simulation with role-playing elements, offering a more substantial storyline compared to other versions. Players navigate various goals to unlock content while customizing their pre-built homes with furniture and decor. Interactions and jobs are executed through mini-games, maintaining a dynamic gameplay flow.

In this version, characters do not age, marry, or have children; however, they can pursue significant relationships and WooHoo. Goals largely dictate relationship dynamics, with close friends potentially moving in as the game progresses. As players complete objectives, their sanity meter, symbolized by a Plumbob, increases, while failing to meet goals leads to rapid depletion, resulting in hospitalization or alien abduction. Unique to this version are "Sanity Points," awarded for completing tasks to unlock special perks, and hidden "Secrets" found in Strangetown, enhancing exploration and social interaction.