We investigate the application of neural networks to the automation of MK spec- tral classification. The data set for this project consists of a set of over 5000 optical (3800–5200°A) spectra obtained from objective prism plates from the Michigan Spec- tral Survey. These spectra, along with their two-dimensional MK classifications listed in the Michigan Henry Draper Catalogue, were used to develop supervised neural network classifiers. We show that neural networks can give accurate spectral type classifications (68 = 0.82 subtypes, rms= 1.09 subtypes) across the full range of spectral types present in the data set (B2–M7). We show also that the networks yield correct luminosity classes for over 95% of both dwarfs and giants with a high degree of confidence. Stellar spectra generally contain a large amount of redundant information. We investigate the application of Principal Components Analysis (PCA) to the optimal compression of spectra. We show that PCA can compress the spectra by a factor of over 30 while retaining essentially all of the useful information in the data set. Furthermore, it is shown that this compression optimally removes noise and can be used to identify unusual spectra. This paper is a continuation of the work done by von Hippel et al. (1994) (Paper I).