The objective of Dig Dug is to eliminate underground-dwelling monsters by inflating them with an air pump until they explode, or by dropping rocks on them. There are two kinds of enemies in the game: "Pookas" (a race of cute round red monsters, said to be modeled after tomatoes, that wear yellow goggles) and "Fygars" (a race of green dragons that can breathe fire while their wings flash).
The player's character is the eponymous Dig Dug, dressed in white and blue and able to dig tunnels through dirt. Dig Dug will be killed if he is caught by either a Pooka or a Fygar, burned by a Fygar's fire, or crushed by a rock.
It takes four (three in some versions) 'pumps' with the player's action button to inflate a monster until it pops. A partially inflated monster will deflate and recover after a few seconds, but half-inflating is a useful way to stun an enemy for a few moments, especially to make sure it remains in the path of a falling rock. The player can also pass through the enemy while it is deflating.
The monsters normally crawl through the tunnels in the dirt but can turn into ghostly eyes and travel slowly through the dirt. The last enemy in a round will try to escape off the top left of the screen.