Jade Empire follows the style of the Wuxia genre within a mythical setting inspired by ancient China. The player, who can be either male or female, progresses through an adventure based on traditional martial arts and can discover and develop new fighting styles: martial arts, weapon styles, magic styles, support styles, or transformation styles. Combat is not turn-based, but is in real time, granting players control over how and when characters dodge or attack.
The role playing statistic system in Jade Empire uses a tri-stat system Body, Mind, and Spirit. These primary stats control the secondary stats of Health, Focus, and Chi (respectively), and the conversation skills of Charm, Intuition, and Intimidation. Focus is used by fighting with weapon styles (such as a longsword or a staff) or by choosing "focus mode", which slows the movements of other characters, allowing the player to attack at high speeds. Chi is a character's spirit energy. The player can use it to heal himself, to charge up a powerful "chi strike" to deal large damage, or to use it as "mana" when casting spells or transformations. Health, focus, and chi can be replenished by collecting power-ups left by defeated enemies in combat or by using Focus Shrines and Spirit Fonts found in the game world. Additionally, certain party members have the ability to add their power to yours—refilling your stats while they remain out of harm's way.
Certain aspects of Jade Empire's gameplay engine, dialogue and quest systems are handled in a way that is very similar to BioWare's Star Wars: Knights of the Old Republic games for the Xbox and PC. Players can speak to NPCs in the game's towns and other areas, asking questions for information to learn more about the world, the storyline, and other characters. Many of these NPCs will offer the player side quests that can be completed for experience points and items. These quests often have more than one method of completion depending on whether the player chooses to follow the "High path" (in the game referred to as The Way of the Open Palm) or the "Low path" (The Way of the Closed Fist). The player can respond to questions or take courses of action that are consistent with the philosophy he or she follows; different actions will affect a character's alignment and his or her ability to cast certain spells or equip certain items.
There is also a vertical-scrolling airplane shooter included in Jade Empire as a mini-game, which is triggered by certain events in the storyline. In the mini-game, only the health and chi bars are active. Chi is replenished by shooting enemies, and is used for special attacks specific to the mini-game. The yellow focus spheres will upgrade your primary cannon up to three times. Red health spheres refill your health bar as in the main game.
Jade Empire also features the constructed language Tho Fan developed by Wolf Wikeley, a Ph.D. candidate in linguistics at the University of Alberta.