Strain engineering provides an efficient strategy to modulate the fundamental properties of semiconducting structures for use in functional electronic and optoelectronic devices. Here, we report on how the strain affects the bandgap, optical anisotropy and stability of two-dimensional (2D) perovskite (BA)2(MA)n-1PbnI3n+1 (n = 1-3) microplates, using photoluminescence spectroscopy. Upon applying external strain, the bandgap decreases at a rate of -5.60/-2.74/-1.38 meV per % for n = 1, 2, and 3 2D perovskites, respectively. This change of the bandgap can be ascribed to the distortion of the octahedra (Pb-I bond contraction) in 2D perovskites, supported by a study on emission anisotropy, which increases with the increase of strain. In addition, the external strain can significantly deteriorate the stability of 2D perovskites due to the strain induced distortion which would make the penetration of moisture and oxygen into the perovskite microplates easier, resulting in much faster degradation rates. Our findings not only provide insights into the design and optimization of functional devices, but also provide a new approach to improve the stability of 2D perovskite based devices.