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Eternal Punishment is a direct sequel to Persona 2: Innocent Sin. It can be considered its "mirror image", since its story deals with many of the same characters, but is told from a different perspective. The gameplay system is nearly identical to that of the previous chapter. The player navigates a party of up to five active combatants on a city map, accessing maze-like dungeons and fighting randomly appearing demons in round-based combat. Like in the predecessor, successful verbal communication with a demon grants the party Tarot cards, which can then be used in a Velvet Room to summon Personae and equip them on characters.

The demon conversation system has been slightly simplified, with characters having less behavior modes when attempting to talk to a demon. The Personae-fusion interface has been streamlined, automatically lining up available characters. The rumor-spreading system from the previous game is featured as well, playing a somewhat more prominent role. A new spell registration service allows the player to teach Personae certain spells they were not equipped with. There are also more Personae to choose from in this installment.

At a certain moment during the course of the plot the player is able to choose one of the two available characters to join the party, which branches the storyline for a short while. If the player completes the game two times with these two different paths, a secret dungeon becomes available for exploration.