The Underworld is the dwelling place of Hades. Although it is considered a part of Olympus Coliseum in regards to game mechanics, it is considered a distinct area in the story. The Underworld consists of two parts, the Cave of the Dead and the Underworld Caverns. The Underworld is also home to the Underdrome where Sora can take part in tournaments. Many bosses are fought in the Underworld, including Demyx, Pete, Cerberus, and Hades himself.
 Settings and Areas
The Underworld can be accessed through the Coliseum Gates. The Underworld Entrance connects the living world to the world of the dead, as well as holding the world's Synthesis Shop run by a hologram Moogle, a save point, and the Underdrome where Sora can talk to Pain and Panic to gain access to the tournaments there. From there, two paths into the Underworld branch off. The first branch that Sora and his friends can explore leads to Hades's domain through the Cave of the Dead. Beginning at the Cave of the Dead: Entrance (where Sora and Auron later fight Cerberus), the party travels down the narrow and meandering Cave of the Dead: Passage before reaching the relatively safe Cave of the Dead: Inner Chamber. From there, the party traverses the ledges and cliffs of the Valley of the Dead before reaching Hades' Chamber.
Later in the story, the second path opens and allows the group to enter the Underworld Caverns. After going down through the Underworld Caverns: Entrance, the party goes through the twisting Underworld Caverns: The Lost Road, which in turn leads to the Underworld Caverns: Atrium. After an encounter with Demyx, the party passes through to The Lock, where Meg can be rescued and a boss battle with Pete takes place.
Sora, Donald, and Goofy emerge in the Underworld when they first arrive, meeting Megara, who is on a quest to convince Hades to stop bothering Hercules. When Sora confronts Hades, he summons Auron, who quickly switches to Sora's side. Hades cannot be hurt in the Underworld, so the team attempts to escape, and Auron and Sora are forced to take on Cerberus before they can leave the Underworld. Back up top, Hercules offers the junior heroes the Olympus Stone, which stops the Underworld from draining all their strength, however, the stone has been stolen by someone in a black cloak. Looking for the stone, they encounter and have their first confrontation with Demyx. The team then rescues Meg with the help of Hercules and Pegasus before opening another gateway with the Olympus Stone.
When the team enters the world for a second time, the Underdrome has been unlocked, presumably when Sora used his Keyblade to open a wall during the first visit. Hades kidnaps Meg to bait Hercules into the games. The group enters the Pain and Panic Cup, and the final competitor is Auron, who is being controlled by Hades. Hercules faces Auron alone while Sora, Donald, and Goofy retrieve the statue Hades is using to control Auron. By returning the statue, Auron regains his free will and refuses to fight. Hades, as Hercules's punishment, drops Meg into the River Styx, and Hercules jumps in after her. Hades believes he is dead, but Hercules returns for the final battle with Hades, a true hero at last. They defeat Hades, everyone is reunited, Auron is freed, and Sora, Donald, and Goofy are immortalized as constellations to mark them as true heroes, much to Phil's disbelief.
 Tournament Cups
Just like in Kingdom Hearts, this world is home to a series of tournaments that unlock throughout the game. There are four primary cups, and then four paradox cups, which are more difficult than the first four. The first three paradox cups feature the same lineups as their originals, but the final cup is the most intense of any competition. Each cup has its own set of rules and limitations. The following is a list of cups and how to unlock them.
 Kingdom Hearts II