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The Southern Islands are a new location in Freedom Planet 2. It is an island chain located south of the Three Kingdoms (Shang Tu, Shang Mu and Shuigang). Sergeant Askal, Captain Kalaw and Aaa all hail from these islands. The Southern Islands is also the location of the city Parusa, which may be the capital of said Islands, and is where Merga was sealed in a crystal prison by the Kingdom Stone, over 100 years ago.
- The Southern Islands' culture and buildings resemble that of the Philippines. This is one of many references to the Philippine culture in Freedom Planet 2.