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Understanding and reasoning over non-speech sounds and music are crucial for both humans and AI agents to interact effectively with their environments. In this paper, we introduce Audio Flamingo 2 (AF2), an Audio-Language Model (ALM) with advanced audio understanding and reasoning capabilities. AF2 leverages (i) a custom CLAP model, (ii) synthetic Audio QA data for fine-grained audio reasoning, and (iii) a multi-stage curriculum learning strategy. AF2 achieves state-of-the-art performance with only a 3B parameter small language model, surpassing large open-source and proprietary models across over 20 benchmarks. Next, for the first time, we extend audio understanding to long audio segments (30 secs to 5 mins) and propose LongAudio, a large and novel dataset for training ALMs on long audio captioning and question-answering tasks. Fine-tuning AF2 on LongAudio leads to exceptional performance on our proposed LongAudioBench, an expert-annotated benchmark for evaluating ALMs on long audio understanding capabilities. We conduct extensive ablation studies to confirm the efficacy of our approach.