Once again players will assume the role of Raz, an intrepid young psychic and now fully fledged member of the Psychonauts, an elite group of international psychic secret agents! The story picks up exactly where it left off at the end of Psychonauts with Raz, Lili, Sasha, Milla, and Coach Oleander flying off to rescue Truman Zannotto, the Grand Head of the Psychonauts. Their mission takes them straight into the heart of the Rhombus of Ruin a mysterious part of the ocean as deadly as two Bermuda Triangles back to back! When the rescue party itself is kidnapped and held prisoner in the Rhombus, Raz is immobilized and must use only his psychic powers to reunite his friends, reveal the identity of the mysterious kidnapper, and free Truman before the madness of the Rhombus consumes all their minds!

In the experience players will see through Raz's eyes in first person, using his various psychic powers to affect the world, and solve puzzles. The power of Clairvoyance allows players to see through the eyes of others, and explore the environment, whilst other abilities such as Telekinesis and Pyrokinesis allow players to move things around with the power of their mind...or just set them on fire!