As the name suggests, Memory Forest is the dream world of Helen's memories. It is a deep forest with lamp posts and trees which have windows and doors. Many things which make Helen remember her childhood can be found deep in the forest, such as a giant merry-go-round, a library and a picnic area. In the first lap of the chase mission, there's a section with floating musical notes that will play London Bridge if the player hits them. The level is most noted for its sundials, which will change day to night when activated, revealing secret items in the level. This level's boss is Queen Bella and its hidden ideya is Helen's Green Ideya.
When Helen and NiGHTS arrive, Reala captures NiGHTS (telling Helen that NiGHTS themself is a Nightmaren) and sends her to one of Will's dreams. Will takes Helen back to the door exiting out, and Helen confirms their friendship with one another. Helen then goes back to the Dream Gate to save NiGHTS in the next mission.
Helen must climb up the chain to dualize with NiGHTS to chase after the Goodles and get their keys to unlock all the NiGHTS cages. Once all the cages have been opened, the player will be sent to battle Queen Bella for the first time.
Helen must go through the forest to meet back up with NiGHTS, who has wandered on while Helen was distracted remembering of a memory when touching a tree. Helen must use the sundials to go through the area smoothly. The player will be timed on their progress through the forest.
Helen and NiGHTS dualize to enter a concert in a sky, where NiGHTS must fly and hit the music notes without missing more than five. The player must hit all the notes to complete the song before 1:10 minutes. The song that is to be completed is Dreams Dreams.
Queen Bella's Ball
NiGHTS will fight Queen Bella for the second and last time, where Queen Bella appears bigger. NiGHTS must use Queen Bella's balls of silk to shatter the plates under her feet so she will fall in the magma pit. The balls of magma will sometimes help, though they do take off five seconds if one lands a hit. The balls also do splash damage if they fall into the lava. After the spider queen herself meets a fiery end, the player gains the Green Ideya of Growth, the Dragon Persona, and the appearance of a mysterious stairway.
- This level was inspired by Mystic Forest from the previous game.
- The Concert Hall that appears in the 4th mission is identical to the one that appears in Helen's secret ending, after Helen and her mother's violins performance.