The game's core gameplay is simple. Taking control of Harry, the player explores Hogwarts castle and grounds. Throughout the course of the game, the player will encounter events that tie into the storyline of the second book.

In the Game Boy Color version of the game, you have to level up different spells. To level the spell to "Duo" You need to use it 25 times. To level up to "Tria" You need to use it 50 times.

Harry Potter can't wait to leave the non-magical world behind after a dreadful summer with the Dursleys, who have locked him in his room for a long time, for his second year. But during the summer holidays, he receives a message telling him that mortal danger awaits if he returns to Hogwarts, before being rescued by Ron, Fred and George Weasley in their dad's flying car.

After a short stay with the Weasleys, he then goes to Diagon Alley to buy his school things. There, he encounters Gilderoy Lockhart, a famous wizard for his good deeds, and he insists a photoshoot with Harry. He also meets Draco Malfoy, his arch-enemy, who makes fun of him for being unable to go into a bookshop without making the front page. Malfoy's father, Lucius, then gives Ginny a little book, saying it's the "least he can do for the poor and needy". After buying all their stuff, Harry and Ron realise that they've missed the Hogwarts Express. They take the flying car to go to Hogwarts, but the car cuts up, and they crash into the Whomping Willow. They escape, but the car flies away by itself all of a sudden. Although they are scolded for their doings, they are happy to be back at Hogwarts.

As the new term starts, the grave prediction he was warned about seems to be coming true. Strange and terrible events occur. Also, Harry begins hearing voices through the walls. One night, Harry finds Nearly Headless Nick and Mrs. Norris petrified, with the words "THE CHAMBER OF SECRETS HAS BEEN OPENED. ENEMIES OF THE HEIR... BEWARE." slashed with blood on the wall.

After pleading with the teachers, the teachers finally tell the students the legend of the Chamber of Secrets. Godric Gryffindor, Helga Hufflepuff, Salzaar Slytherin and Rowena Ravenclaw were the founders of Hogwarts. Godric, Helga and Rowena all agreed that Muggle-borns can also go to Hogwarts, but Slytherin disagreed, and eventually left, but before leaving, he constructed a chamber, which would be named, "The Chamber of Secrets", that houses a huge monster, and that only the "Heir of Slytherin" could open it.

Harry, Ron and Hermione join a dueling club. As Harry is dueling with Malfoy, Malfoy casts a snake, which attacks the students, but Harry suddenly says a combination of hisses(although he was actually saying "Leave them alone"), and the snake leaves. Hermione then tells Harry that he, without knowing it, had just spoken Parseltoungue, the language of snakes, and speaking Parseltoungue was what Salzaar Slytherin was famous for, which might make people think that Harry is descendant of him.

With the bloody words still in mind, Harry thinks that Malfoy is the heir of Slyherin, so Hermione makes a Pollyjuice potion to disguise Harry as Goyle. After it is done, Harry sneaks into the Slytherin common room. Harry questions Malfoy, and although Malfoy is not the Heir, Malfoy does reveal that 50 years ago, the chamber was opened and a Muggle girl was killed. Now, he personally hopes that the chamber will be opened again and Hermione will be killed.

Meanwhile, after changing back. Harry finds a black book, that turns out to be the diary of a boy named Tom Marvolo Riddle. The diary takes Harry back 50 years into a memory of Tom Riddle. There, Harry witnesses Hagrid being confronted by Tom, who accuses Hagrid's pet, a baby acromantula named Aragog, and is blamed for opening the Chamber of Secrets and is expelled. After that, just as Ron and Hermione are discussing about it, Harry finds that the diary has been stolen. Harry decides to go to Hagrid's Hut in the grounds to talk to Hagrid, and he sees Lucius Malfoy arresting Hagrid, and telling Dumbledore that, he, being the head of the educational department of the Ministry of Magic, and the other twelve members feel that it is time for Dumbledore to "step aside". He follows Lucius an Hagrid into the forest, and finds a grown up Aragog, now a gigantic and deadly Acromantula, who tells him that he had been thought to be the monster who had been harming students, but it had actually been a much larger and frightening creature, and had killed a girl in a bathroom, before he tries to kill Harry, but Harry is saved by Ron.

After getting back to the school, they find that Hermione has been petrified, and find a piece of paper in her hand, which talks about a creature called the balsilk. With razor sharp teeth and deadly eyes that whomever looks into will die, the balsik is the king of monsters. Harry figures out that Hermione had been petrified after seeing the balsilk's eye through a mirror, and that Mrs. Norris had seen its reflection in a puddle of water, and Nick was petrified just because he was already dead. Harry realizes that the girl Aragog had said was killed was actually Moaning Mrytle, the ghost who haunts the suspended girl's bathroom, before it is announced that Ginny has been kidnapped by the monster. All students are ordered to stay in their common rooms for safety. Gilderoy Lockhart, is given the task of getting Ginny back, although Harry and Ron learn that he actually doesn't know much, and he actually just took credit for others doings.

Concluding that the entrance to the chamber is in the girl's bathroom, they go there with Lockhart, and Harry opens the chamber by speaking parseltounge. After jumping miles under the school, Lockhart grabs Ron's broken wand and tries to erase their memory, only for it to backfire at him, and it hits him so hard, that the roof falls in on him and Ron. Although they are safe, they cannot get out, so Harry continues on to the chamber alone. After finding the chamber, Harry finds Ginny lying unconscious on the floor, the diary next to her. Tom Riddle suddenly comes out of the diary as a ghost and says that he had stored his sixteen year-old self in the diary, and after feeding on her memories, he became strong enough to have his soul come back. He then calls the basalisk and then Dumbledore's pet bird Fawks suddenly comes out and attacks the balsilk. Using the sword of Gryffindor, which he finds on the floor, he defeats the balsilk, and stabs Tom Riddle's diary, destroying Tom's soul. Ginny then wakes up, and apologizes for her actions, explaining that Tom had made her slash the walls with words, and also she had stolen the diary too.

Dumbelore's place is restored after the members of the educational board decide to stand up to Lucius, who is also sacked. Finally, the House Cup ceremony begins. Malfoy taunts Harry, telling them that they will not steal the Cup from them like last year, but much to their surprise, Slytherin lands in second place, and Gryffindor wins! The Gryffindors happily celebrate their victory.