Investors in Asia remained cautious with oil prices under pressure, and with the US Federal Reserve about to start its latest meeting.
The US central bank is widely expected to raise interest rates for the first time since June 2006.
Oil prices started to slide again after staging a mini-recovery late on Monday.
Brent crude had fallen to $36.33 a barrel on Monday before rebounding and heading back towards $38, but then it slipped back to $37.61.
In Japan the Nikkei 225 closed down 317.52 points, or 1.7%, at 18,565.90 after falling as much as 3% on Monday.
Elsewhere, Australia’s S&P/ASX 200 ended the day down 0.4% at 4,909.6 – the lowest the index has been since mid-2013.
The benchmark was pulled down by some of the country’s big banks, with Commonwealth Bank shares sinking 0.7% while ANZ finished the day down 1.3%.
Continued worries over a global oversupply of oil also hit the market.
“The [oil] supply side is catching most of the market’s attention,” said Evan Lucas from IG Markets.
“Iran added to the Saudi commentary overnight in looking to further increase its production.”
In South Korea, the Kospi index closed up 0.27% at 1,932.97.