We continue our investigation of the SU(2) lattice gauge theory in ter
ms of an independent set of gauge-invariant Wilson loops. It is demons
trated how the standard measure of the gauge-covariant formulation can
be transformed to a loop-variable measure. Explicit calculations in t
wo and three dimensions illustrate the validity of our approach. We so
lve the 1 x 1 theory in terms of loop variables, and discuss the deriv
ation of the classical equations of motion and possible consequences f
or the continuum theory.