The first downloadable content (DLC), "Knothole Island", includes the ability to resurrect the player's dog by sacrifice. It was released 13 January 2009, and features a new map, with new items and quests. The DLC includes 3 new achievements worth 100 points. A free update allows players who haven't purchased "Knothole Island" to still play online with others who did. "Knothole Island" is available for 800 Microsoft Points. The DLC has received average reviews by critics, who praised the overall quality of the new items, and the production values of the island itself, but have criticized the shortness of the quest.
The second DLC, "See the Future", includes the ability to change the player's dog's breed. It was released 12 May 2009 The DLC includes a quest based around three cursed items from Murgo the Trader. In addition to these new quests and items, one new area is included and players have the ability to change the breed of their dog as well as the ability to get their dog back if players chose not to resurrect their dog at the end of the main storyline. The DLC includes 13 new achievements worth 250 points. It is available for 560 Microsoft Points The DLC was met with positive criticism: "[See The Future] should be an essential purchase for Fable fans. It doesn't change things enough to win over anyone who didn't enjoy the main game, but as an expansion it extends the game in ways that are certainly worth experiencing."
As of September 2009, the entire Fable II game is available for download through Microsoft's Xbox Live Game Marketplace. When first released, the downloadable version of the game was broken up into 5 game episodes that play identical to the disc version of the game, and the first episode of the game was free to download, while Episodes 2, 3, 4, and 5 could be purchased within the game. Any player who purchased the disc version after the first episode can transfer all save data. Currently, only the entire game can be purchased, and Episode 1 is no longer available as a demo. The downloadable version features the complete version of the disc-based game, as well as full compatibility with the previously released game add-ons, "Knothole Island" and "See the Future".
On 7 September 2009, a compilation of the Fable II disc with all the downloadable content was made available in Europe, sold as "Fable II - Game of the Year Edition". On 5 January, 2010, the "Game of the Year Edition" was made available in North America using the Platinum Hits branding.