The new device has two cameras for taking photos and video chatting. It has a faster processor. It's also thinner, measuring at 8.8 millimeters instead of the current 13.4 millimeters.
However, it won't come with Flash, so users may not be able to go to certain websites and see videos.
More than 15 million of the original touch-screen tablet computers were sold in the first nine months on the market. A newer version of the device will help the company widen its head start against competitors, most of whom are just beginning to sell their first tablets.
The iPad runs the same basic software as Apple's iPhone and iPod Touch. It has a screen that measures 9.7 inches diagonally and it runs for about 10 hours unplugged. The first-generation models start at $499.
The new iPads will cost the same as the originals - $499 to $829, depending on storage space and whether or not they can connect to the Internet over a cellular network. It will go on sale March 11 in the U.S. with no pre-sales.
Apple said there will be black and white versions, despite its problems getting the promised white iPhone 4 models to market. The first iPad came only in black. In the U.S., the iPad 2 will work on AT&T Inc. and Verizon Wireless.
CEO Steve Jobs, who is on an indefinite medical leave of absence, made an appearance at the event. Jobs walked on stage to standing ovation and told the audience, "We've been working on this product for a while and I just didn't want to miss today."
Jobs looked frail, wearing his signature black mock turtleneck, blue jeans and wire-rimmed glasses.
The Associated Press contributed to this report.