The core gameplay consists of collecting items and defeating robots that attack various areas of Bikini Beach while traversing platforms and avoiding environmental hazards such as spikes and flames. Some areas require different characters to defeat, as each character has their own unique abilities. Players can control SpongeBob SquarePants, Patrick and Sandy. Switching characters in the console version requires the player to find a bus stop, use that stop and the current character will switch to another character, using the stop again will switch back to the previous character, allowing the player to choose two characters per level. The default character for the entire game is SpongeBob SquarePants; Sandy and Patrick do not share any playable characters for the levels.

The game is a 3D platformer that requires players to collect three main types of items." Shiny items" are the game's currency and can be used to pay for passes to the game area or to purchase gold shovels from Mr. Krabs. The "golden shovel" is used to grant access to new areas, hidden throughout the game, and can also be obtained by completing tasks set by Squidward's tentacles as well as several other characters in the cartoon.

Patrick's "socks" are also distributed throughout the game, and he rewards SpongeBob with a golden shovel in exchange for his 10 socks. SpongeBob can also blow bubbles to form different shapes as special attacks/actions that can be used to further develop in the game and learn two new bubble moves from his bubble buddy as the game progresses.

The game also includes props. The trampoline helps the player bounce further onto ledges or platforms, buttons activate certain things throughout the game, and the pressure pad acts like a button; however, its effect only works when the player is standing on the pressure pad, or has other objects placed on it. Once something on the pressure pad is removed, its effect disappears.

There are also character-specific abilities, such as Sandy's ability to swing with a Texas hook, SpongeBob's ability to swoop with a bungee hook, and Patrick's ability to pick up and throw melons known as "throw fruit" and ice cubes known as "freeze fruit.

While some areas can be navigated by any character, certain areas can only be done by specific characters, as each area has unique abilities. SpongeBob can make a foam helmet that can be used to bash enemies in the head. Patrick can throw objects at buttons, robots, and pressure pads, and can throw "frozen fruit" at slime bodies to freeze them. Finally, Sandy can slide through huge gaps and destroy enemies and objects with her lasso.