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The game is set in the southwest United States in an alternate version of the year 1982, during the Reagan Administration. The game is less complex than its predecessor, Interstate '76, lacking the detailed armor and weapon management of the original. Its play-style is closer to console-based vehicular combat games like Twisted Metal, with a single health bar displaying both armor and chassis strength, as opposed to '76's armor/chassis strength system. The vehicle models have been updated to reflect the change in era, and overall, the game has a new wave feel, with several hitherto-unreleased Devo songs being on the soundtrack, as opposed to the first game's funk-inspired style.
Interstate '82 features a story-mode like its predecessor, with one new option: the player can exit his vehicle and enter another, adding some strategy to the game's storyline. Another new addition is the ability to skin the new vehicle models.
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Set 6 years after Interstate 76, taking place in 1982, Taurus has given up his life as a vigilante due to no longer coping with the killing and death involved. Meanwhile, Groove Champion (Protoganist of the first game) lives in a dingy trailer after attempting to make a call, two unknown people storm his residence demanding to know who he was calling until he flees by tricking them. He quickly gets in his car, sets his trailer on fire, and tries to escape, however, his tyres are blown out and he is caught.
After having a nightmare about Jade. Taurus wakes up to a phone ringing and answers it to discover it is Sky Champion, another sister of Groove. They agree to meet at a gas station, upon meeting Sky tells Taurus her intention to find Groove, Taurus is reluctant to get back in his old life but agrees and demands to be left alone afterwards. They head to Las Vegas to inquire about Groove, not knowing that a woman is relaying information to a German voice on the other line.
They investigate Groove's trailer, Sky asks Taurus to teach her about his vigilante skills, Taurus enraged about this and believes that Groove is dead, Skeeter arrives with parts for the vehicles until Creepers are seen heading their way, Taurus battles the Creepers and after finishing them off hears a CB radio broadcast that Groove is under captive by Dick, a creeper.
Taurus saves Groove from Dick and discovers bombs ready to go off, they luckily escape before the bombs can explode. While at the trailer, Taurus sees a hallucination of Jade until Sky calls him over. Groove tells the whole story, him and the VRN noticed Creepers carrying unusual amounts of money across the desert, Groove investigated and discovered that the people involved were the US government and an organisation named the "Super Secret Service".
This until the SSS agents attack them, they fight them off and capture an SSS agent and discover a tracking device in Groove's mouth. The police are then alerted to their presence, they escape and find a helicopter disguised as UFO. The woman from earlier appears and held them at gunpoint, Taurus quickly shoots the woman. She attempts to flee in the helicopter only to be shot down.
They head back to Vegas and discover the President's motives, to build an army of Creepers and overthrow Congress and start a new world order. A battle ensues with a giant robot involved, the robot is destroyed and Taurus shoots the President and the trio leave.
The President, slowly bleeding to death, blames his right-hand man for his failure and collapses.
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