The game is a side-scrolling platformer. The gameplay follows the same pattern of Castle of Illusion Starring Mickey Mouse, which was released for Sega consoles a year before, but unlike Mickey, Donald can attack enemies by hitting them with a hammer or throwing discs. He can also attack faster by collecting star items.
The game consists of seven stages: the Northern Woods, the Great American Forest, the Andes Mountains, the Tropical Isles, the Pyramids and the South Pole, followed finally by Magica's Castle.