The TRS-80 Model II was incompatible with the TRS-80 Model I. It was targeted at the small-business market and launched in 1979.

The machine runs on the Zilog Z-80 CPU at 4MHz and comes with 32KByte of memory. A single sided Shugart 500K 8" Floppy Disk Drive is built in, as well as a 12" B&W Television CRT.

The Model II's video circuitry was significantly improved to create a better picture, which was one of the biggest criticisms of Model I. The Text display was 80x24 and added lower case letters, something Model I was lacking.

The Model II had a passive backplane with eight expansion slots. Four of these slots were occupied by the CPU card, the floppy controller, the keyboard/video card, and RAM. Four expansion slots were available for things like a hard disk controller, a networking card, and even a 68000 CPU board that could address 256KByte of RAM. There was also a board for a true graphics mode of 640x240 pixels. It could overlay the text screen with the bitmap display. The same graphics board could also be fitted to the later Models 12 and 16. It came with a modified BASIC that had rudimentary screen drawing capabilities like line, box, circle, shading, filling, viewport capabilities, and array transfer between graphics RAM and CPU RAM.

THe Model II architecture supported up to 512KByte of RAM via a bank-switchable upper 32K page segment. Up to fifteen 32K pages were supported. However the machine did not have enough card slots to actually reach the 512KByte RAM. This was because RAM only came in 32K or 64K cards, and only a few open card slots were available.

The Z80 quickly became popular in the personal computer market, with many early personal computers, such as the TRS-80 and Sinclair ZX80, using the Z80 as their central processing unit (CPU). It was also widely used in home computers, such as the MSX range, SORD, and the Amstrad CPC, as well as in many arcade games. Additionally, it was also used in other applications such as industrial control systems, and embedded systems. The Z80 was widely used until the mid-1980s, when it was gradually replaced by newer microprocessors such as the Intel 80286 and the Motorola 68000.

The Z80 microprocessor was developed by Zilog, a company founded by Federico Faggin in 1974. The Z80 was released in July 1976, as a successor to the Intel 8080. It was designed to be fully compatible with the 8080, but also included new features such as an improved instruction set, more powerful interrupts, and a more sophisticated memory management system.

The Z80 quickly became popular in the personal computer market, with many early personal computers, such as the TRS-80 and Sinclair ZX80, using the Z80 as their central processing unit (CPU). It was also widely used in home computers, such as the MSX range, SORD, and the Amstrad CPC, as well as in many arcade games. Additionally, it was also used in other applications such as industrial control systems, and embedded systems. The Z80 was widely used until the mid-1980s, when it was gradually replaced by newer microprocessors such as the Intel 80286 and the Motorola 68000. The design was licensed to Synertek and Mostek as well as the European SGS.

The Z80s instruction set is binary compatible with the Intel 8080, so that 8080 code such as the CP/M Operating System and Intel's PL/M compiler for the 8080 can run unmodified on the Z80. The Z80 had many enhancements over the 8080 such as 16-bit data movement instructions, block copy and block I/O instructions, single bit addressing of all registers, IX/IY offset registers, better interrupt system and a complete duplicate register file for context switching during an interrupt.