While the Kowloon in the game is fictional, it is based on the Kowloon Walled City (Japanese: 九龍城 Kyūryū-jō or 九龍城砦 Kyūryū-jōsai) located on mainland China, before its demolition in 1993. Despite being on the mainland of China, Kowloon is an enclave of Hong Kong, so still part of the Hong Kong territory. The game depicts Kowloon with some artistic liberties, such as being on a hill, further away from the nearby city, etc.
The city is filled with many high rise buildings, the largest being the Yellow Head Building.
These are the areas Ryo can visit in Kowloon.
- The name Kowloon (九龍) literally means nine dragons, which is part of the password Ryo needs to tell Master Chen back in Yokosuka.
- The Yellow Heads of Kowloon are a depiction of the various gangs that operated and governed the actual Kowloon Walled City.
- In Shenmue II, while the sun can be seen while in Kowloon, most streets in the actual Kowloon Walled City are dark as the buildings cover the sunlight.
- While Dragon Street is accessible in the Kowloon segment of Shenmue II, it is actually on the outskirts of Kowloon and not actually part of it.