Battletoads/Double Dragon has three play modes: a single-player, a "2 Players A" mode where the players can hit each other, and a "2 Players B" that doesn't have that. Its engine and gameplay is from the original Battletoads, and less like Double Dragon. Like the prior Battletoads installment, there are only three continues and no password system, and in the two-player modes, if one player loses all lives, both players have to start a level over. The 16-bit versions have identical gameplay to their NES counterparts, attacks and jumping are triggered by only two buttons.

The player has a choice of five playable characters: Billy and Jimmy Lee from Double Dragon, and Zitz, Pimple, and Rash from Battletoads. All of the toads are equipped with their usual "Smash Hit" attacks, such as big punches ("Kiss-My-Fist"), big kicks ("Big Bad Foot"), double-handed hits ("Nuclear Knuckles"), headbutt ("Battletoad Butt"), a wrecking-ball-like charge used while hanging on a cable ("BT Bashing Ball"), kicks while hanging on a rope ("Swingin' Size Thirteens"), a pick-up and throwing of enemies ("Take Out the Trash"), backward kicks while riding a speeder bike ("Bikin' Bash"), walker leg bashes ("No Way Back Thwack"), and enemy slamming ("Twin Side Slam"), with a new attack being a kick while hanging on a ledge named "Back 'N Front Punt."[17] Likewise, the Lee twins' Dragon Force techniques are playable, such as spin kick, knee drops, and elbow-drops.[18] New abilities include hanging off of and moving across sides of platforms, and kicking off enemies while doing so, although the player can fall off and lose a life if other enemies step on his fingers.