Only available once 2-9 is cleared and after the corresponding operation is cleared with 3 stars, the Challenge Mode version is identical to the original, but with a handicap that either buffs enemies, debuffs friendlies, or imposes various limitations, making the operation more difficult. Furthermore, enemies in operations' Challenge Mode version usually, but not always, have their stats increased (which stacks with the Challenge Mode handicap) – though this is not stated in-game, and the Life Point is reduced to only 1; therefore, the player must not let any enemies enter the Protection Objectives at all costs.
Practicing the Challenge Mode version of an operation costs three Drill Plan instead of the normal version's one, and in the event the player quits or fails the Challenge Mode version, only half of the Sanity spent (rounded down) that will be returned.
Clearing the Challenge Mode version of an operation increases the corresponding operation's rating to 4 stars and awards one additional Originite Prime as well as plaques for certain Main Theme and event operations if done for the first time. Unlike the normal version, though, the Challenge Mode version do not award any of the operation's regular, special, and extra drops, thus there is no need to play the Challenge Mode multiple times.
The Challenge Mode likely inspires the Contingency Contract seasonal event, where the player can use the contracts to make the operation harder, but with multiple handicaps.
Since Episode 10, Challenge Mode has been superseded (at least in the Main Theme) by the Combat Environment system that includes the Ordeal Ground version of operations which, as with Challenge Mode, feature handicaps but no longer reduces the Life Point to 1, consumes only one Drill Plan for a practice run, refunds most of the Sanity spent upon quitting or failing, and awards the operation's regular, special, and extra drops.