The NEVERWINTER NIGHTS 2 Toolset faced unique challenges. It was rebuilt from the ground up to support a new graphics engine, yet needed to work with existing data formats and an existing game engine. It needed to be easier to work with for designers, and support more powerful ways of editing the game, yet had to be developed on a short timetable so the game could be built with it. This lecture discusses the challenges of modern tool development, how they have changed in the past few years, and how these challenges were tackled for NEVERWINTER NIGHTS 2.