RuneScape 2 was the name given to RuneScape when Jagex released the BETA version of what is now known as RuneScape (or "RS"), on 1 December 2003 (RuneScape 2 Beta is Here!). The working name was RuneScape 3D. The finished version was launched on the 29 March 2004 (RS2 Launched!). It is one of the largest updates since the game's initial launch. It saw the introduction of a more powerful game engine, three-dimensional graphics, a new combat system, improved sound including the addition of music, and many other new features.
This three-dimensional version featured a vast improvement to the game engine as well as improving on the sound and interfaces. The core engine allowed Jagex to expand the game to levels previously not possible.
Jagex first announced the upcoming release of a "much faster 3D engine" on 11 June 2002 . Over time, Jagex released graphical previews as well as progress reports and other information about the many future changes.
The project was first referred to as "RuneScape 2" in an October 2003 news post  (it was previously known as the "big 3D update" or the "new game engine"). It was also revealed that the beta would become available on 1 December.
Jagex originally did not want to create a Hallowe'en event for 2003, because they feared it would delay the planned release date of the beta. In one of their polls, they asked players if they would want a new Hallowe'en event but also delay the release of RuneScape 2 Beta, or keep it on schedule and have a "pancake day" in February instead. 78% of voters wanted a 2003 Hallowe'en event. However, RuneScape 2 was still released on schedule, because the developers came in early and on weekends to do extra work..
The new combat system was explained in detail in a 24 November newspost.
All members had access to the first phase of RS2 Beta. Their characters and stats were copied over from the live game, but their items and quest history were not. This was deliberate, as Jagex wanted players to test all of their content. Initially, only the free-to-play area was available with new areas and quests released gradually over the beta period. The Lumbridge Teleport spell was also deliberately broken so that it could be cast without runes even at level 1 Magic. This allowed players to escape to a safe area in the event they found themselves trapped by a glitch.
The second phase of Beta began on 3 March 2004. Players again had their characters copied over from the live game (including items and quest status this time). The Lumbridge Teleport spell also had its level requirement and rune cost reinstated.
On 17 March, the final phase began. Characters were once again copied over from the live game. For this stage of testing, free players were given access to Beta as well as members.
RuneScape 2 was launched on 29 March 2004. Players' stats and quest history were copied over to RS2, which became known only as RuneScape to reflect its status as the main game, one last time. Several RuneScape 1 servers were also left online, and it was officially named "RuneScape Classic". Players were given the choice as to which game they wanted their items to be transferred to. Afterward, they became completely independent of each other (aside from sharing login information and the friends list).
RuneScape 2 dramatically impacted the gameplay experience. Some of the changes and additions include:
- A new core engine, allowing Jagex to expand the game to levels not previously possible (paving the way for new content such as complex player-vs-player minigames, player-owned houses, and randomly-generated scenarios, which would be added over the coming years).
- Upgraded 3D graphics, along with animations. Every character in the game had to be redesigned, and the use of polygons allowed a greater level of detail for landscapes (for example, walls and fences could have thickness). Animations used more frames, allowing for smoother motion and a wider variety of animations. The camera was also updated to move vertically as well as horizontally.
- Complete rework of the Combat system. The combat triangle concept was central to the new system. The traditional "three round" model was removed. This made it possible to move around, eat food, use Ranged weapons, and perform most other actions while in combat. The Bind, Snare, and Entangle spells were introduced for mages to use in PVP. Mages were also given the ability to autocast most combat spells using a staff. Attack styles were added to Melee weapons, encouraging fighters to try a variety of weapons against different opponents (contrasting RS1, where the dominant strategy was to always use either a battleaxe or a two-handed sword). The former 'Paralyze Monster' and 'Protect from Missiles' prayers were replaced with the familiar Protect from Melee, Protect from Magic, and modern Protect from Missiles prayers. Several locations were designated as multicombat areas. Monsters became more intelligent, with some using Ranged, Magic, and other special attacks. Finally, the equations for calculating combat level and gaining experience were reformulated.
- New interfaces. Several tabs that were merged together in RS1 (i.e. Friends list/ignore list, options/logout, Magic/Prayer) were separated in RS2. Notably, it became much easier to use shops and banks or to trade with other players because players could add or remove large quantities of items with a single click. Dialog boxes were also introduced for conversations with NPCs, allowing more than one player to talk to a given character at a time.
- Upgraded audio system. RS1 only had a small selection of sound effects, and they were only available to members. RS2 added more sound effects, as well as music, for all players. The new Music Player allowed players to unlock and replay songs as they found them.
- Bank notes, making it much easier to buy and sell items to other players. This was originally planned as bank-to-bank trading, but was changed because Jagex didn't want banks to become too crowded.
- The ability to run.
- Runecrafting skill and Rune Mysteries quest.
- New system for duelling. The Duel Arena was added to the game, and duelling elsewhere became impossible. The new system had more options for defining the parameters of a battle.
- Expanded leather crafting, producing new armour for rangers (including hard leather body, studded leather armour, and dragonhide armour).
- Removal of fatigue and addition of random events.
- New weapons, including warhammers and throwing axes.
- Special animations for emotes.
- More options for customizing a player's basic appearance, with the introduction of the Hairdresser's Salon and Thessalia's Makeovers.
- Addition of the Ranging Guild.
- Enhanced Party Hall, for holding drop parties.
- Two new type of bones: Babydragon bones dropped by baby dragons, and burnt bones found in the Wilderness.
- Lantadyme herb and Antifire potion, to combat dragons' new dragonfire attack.
- Mithril seeds began producing flowers, which could be picked and wielded.
- Free players were given access to trees and logs up to yew along with bows up to maple (with corresponding arrows up to adamant). It became possible to burn logs above and including oak, and it was no longer necessary to drop logs before lighting them.
- NPCs began stunning players instead of attacking them upon unsuccessful pickpocketing.
- Newcomer maps, to help new players find their way around the world.
- The ability to decant potions, combining low-dosed vials into higher-dosed ones.