This paper is the second in a series of two works detailing the descriptive and comparative anatomy of the xenarthran ear region (basicranium and its immediate surrounds, including the middle but not the inner ear). The study was begun by Patterson and Segall in 1945 and continued until Patterson's departure from the Field Museum in 1955, but was never completed. Part I (Patterson et al., 1989) covers the anatomy of the auditory region in cingulates, i.e., armadillos, pampatheres, and glyptodonts. This paper examines the auditory anatomy of the Pilosa, i.e., sloths and anteaters, and the Palaeanodonta. Descriptions are provided for 20 extinct and extant sloth genera, four living and extinct genera of anteaters, and three genera of the extinct suborder Palaeanodonta. In addition, a section detailing the morphology of the auditory ossicles of all groups of living and extinct xenarthrans, both cingulates and pilosans, is included. The comparative anatomy of this region of the xenarthran skull provides new evidence in support of a monophyletic grouping of palaeanodonts and xenarthrans exclusive of pangolins, and a diphyletic origin of the living tree sloths, with Choloepus being linked to the extinct family Megalonychidae and Bradypus to the extinct family Megatheriidae. The suggestion is also put forward (although somewhat weakly supported) that the Megatheriidae and Megalonychidae form a monophyletic clade, with the family Mylodontidae as the sister group to this clade.