Dekoboko Densetsu is a humorous game that combines elements of arcade action and racing. Up to five players can compete in the races. All the stages are vertically-scrolling (top-down), with the cars represented as small sprites of different colors. The player's goal is not only to beat the other cars, but also reach the finish line safely: each car has limited hit points, and continuously receives damage during the race.
Damage can be sustained by driving over environmental hazards (pits, traps, bombs, etc.), failing to move the car forward in time (if the screen scrolls while the player-controlled car is at the bottom, it takes damage), being hit by the many enemies encountered in the game (which include a wide variety of wild animals, humans, fantasy creatures, monsters, etc.), or being hit by a competing car. Cars have the ability to jump over obstacles or enemy fire, avoiding damage.
Over the course of the races, cars accumulate points depending on their results. These points can be invested in purchasing a limited amount of destructive weaponry (missiles, bombs, "boxing glove" that hits enemies from the side, oil to drop behind the car, etc.) or protective measures.