Artificial Intelligence is one of the oldest and most exciting subfields of computing, covnering such areas as intelligent robotics, intelligent planning and scheduling, model-based reasoning, fault diagnosis, natural language processing, maching translation, knowledge representation and reasoning, knowledge-based systems, knowledge engineering, intelligent agents, machine learning, neural nets, genetic algorithms and knowledge management. The papers in this volume comprise the refereed proceedings of the Second International Conference on Artificial Intelligence Applications and Innovations,held in Beijing, China in 2005. A very promising sign of the growing importance of Artificial Intelligence techniques in practical applications is the large number of submissions received for the conference - more than 150. All papers were reviewed by at least two members of the Program Committee and the test 93 were selected for the conference and are included in this volume. The international nature of IFIP is amply reflected in the large number of countries represented here.