Xpand Rally Xtreme is the sequel to the 2004 rally game Xpand Rally. Just like the previous game, it is a pure simulation with no story and it does not carry any licenses. In the main career mode, the player starts with a default car. By winning races against three opponents, only shown as ghost cars, money becomes available to upgrade the vehicle or buy a new one. There are 15 cars in total, in 23 versions, with 8 new models and 67 individual races. Cars range from real 4x4 off-road monsters to exotic racing cars for the flat-track races - now with fast parallel tracks.

There are also Free Style races, checkpoint races against real opponents unlike the previous game where only ghost cars were shown. While some locations such as Finland have been removed, the new scenery includes Italy, USA, Malaysia, China and Japan. There is a detailed damage models, extensive tuning in the garage, and realistic physics. Once again the game can be played in two modes: the hardcore Simulation mode, and the Arcade mode where the damage model and controls are more forgiving.

New tracks can be constructed through the included ChromeEd editor and there are various multiplayer options.