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Challenge Mode is the third available mode to play a normal level as, but it only appears in the PlayStation Portable version of LEGO Star Wars II: The Original Trilogy and LEGO Star Wars: The Complete Saga; the other two modes are Story Mode and Free Play Mode. Once a Story Mode level has been fully completed, Free Play Mode and Challenge Mode are unlocked. Challenge Mode is much like Free Play Mode; you have a choice of characters and there are no cutscenes. The difference is that there are ten Blue Challenge Canisters scattered through out the level. These are much like Minikit Canisters, but they are in different locations. There is also a time limit, which varies depending on the size of the level. The goal is to collect all ten within the time limit, at which point you will win the mode. Completion of all the Challenges is necessary for 100.0% completion for the game.

In the PlayStation Portable version of LEGO Star Wars II: The Original Trilogy, completing a level's Challenge Mode unlocks one or more prequel characters, as a replacement for the Use Old Save extra due to the lack of a PlayStation Portable version of LEGO Star Wars: The Video Game. This does not happen in LEGO Star Wars: The Complete Saga, as there the prequel characters are unlocked or purchased due to the combination of the first two games.

Challenge Mode has so far not returned in subsequent games.

List of Prequel Characters (Only in LSW2-PSP)[]

Level Characters
Secret Plans TC-14*
Through the Jundland Wastes R4-P17*, PK Droid*
Mos Eisley Spaceport Padmé*, Anakin Skywalker (Boy)*
Rescue the Princess Battle Droid*, Battle Droid (Security), Battle Droid (Geonosis), Battle Droid (Commander)
Death Star Escape Droideka*
Rebel Attack Clone (Episode III, Pilot)*
Hoth Battle Ki-Adi Mundi*, Kit Fisto*, Luminara*, Shaak Ti*
Escape from Echo Base Padmé (Battle), Padmé (Clawed), Padmé (Geonosis)
Falcon Flight Geonosian*
Dagobah Clone (Episode III, Swamp)
Cloud City Trap Super Battle Droid*
Betrayal over Bespin Queen Amidala, Captain Panaka*, Royal Guard*
Jabba's Palace Disguised Clone, Boba Fett (Boy)*
The Great Pit of Carkoon Jango Fett*
Speeder Showdown Clone, Clone (Episode III), Clone (Episode III, Walker), Commander Cody*
The Battle of Endor Wookiee*, Jar Jar Binks*
Jedi Destiny Chancellor Palpatine*, General Grievous*, Grievous' Bodyguard*
Into the Death Star Mace Windu*, Mace Windu (Episode III)
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