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The Character Creation system in The Elder Scrolls II: Daggerfall is very similar to the system used in The Elder Scrolls: Arena. The creation of a character begins by selecting the province that the Hero hails from:
- High Rock – Breton
- Skyrim – Nord
- Morrowind – Dark Elf
- Hammerfell – Redguard
- Sumurset Isles – High Elf
- Valenwood – Wood Elf
- Elsweyr – Khajiit
- Black Marsh – Argonian
After choosing the Hero's province, you must select the gender. From there, the player gets to choose their class, or take a test to have their class decided for them. From there, the player gets to chose their background by answering another test, or have it randomly generated.
Afterward, the player will then input their name, and choose their character's face. Afterwards, points must be distributed. When the player is done choosing where to distribute the points, there will be an overview menu of everything. Once the player hits accept, their character is created.