The game uses a side-view perspective. Players move through linear stages, defeat groups of soldiers and monsters, collect magic items, and eventually fight powerful bosses. The main objective is to reach Death Adder's stronghold and defeat him.

Players choose Ax Battler, Tyris Flare, or Gilius Thunderhead. Each character has different strength, speed, and magic capacity. Attacks can be combined with movement and jumping, while magic power is gathered from small spell-bearing enemies. Certain stages also contain rideable beasts that can attack foes.

Golden Axe supports solo play and cooperative two-player action, with progression through a fixed arcade-style stage sequence rather than persistent character development.

Stay near the center of the screen so enemies are less likely to surround you, and prioritize foes approaching from behind. Use jump attacks to reposition, but do not rely on them against groups with strong anti-air attacks.

Collect magic items deliberately. Save large spell charges for crowded encounters or bosses, and use mounted beasts while they remain available. In two-player mode, avoid attacking from opposite sides when possible so both players can concentrate damage on the same target.