Retrofit 2.0 is an updated version of Retrofit, a type-safe REST client for Android and Java. Some key differences in Retrofit 2.0 include calls returning Call objects instead of Responses, OkHttp now being required, and improved URL handling. Retrofit 2.0 also features enhanced converter support to serialize and deserialize JSON and XML to and from POJO objects using libraries like Gson, Jackson, and Moshi.