Championship Rally is an overhead racing game with four game modes: Tournament, Single Race, Time Trial and Versus. The latter lets two players compete against each other by connecting the consoles with Comlynx cables.
There are seven tracks to choose from, with three of them (Desert, Meadow and Downtown) available from the beginning and the remaining four (Alaska, Coastal, Valley and Formula) being unlocked once the player has beaten the computer opponents in Tournament mode.
Multiple AI levels can be selected for the computer opponents, as well as speed and damage settings for the player's own vehicle.
The game also features power-ups and pitfalls on each track: speed-up zones, repair bonus, potholes, oil slicks, etc.