Players control Woody through several stages (17 for the Super Nintendo version, 18 for the Genesis/Mega Drive version, and 10 for the Game Boy version) that encompass the entire plot of the film. Several obstacles lie between the player and the goal of each level, not least of which is a wide assortment of enemies. Woody is equipped with a pullstring whip, which will temporarily "tie up" opponents, letting Woody pass by unharmed. It cannot, however, kill enemies (with the lone exception of Nightmare Buzz, the only boss in the game to be permanently defeated through the whip). This whip can also latch onto certain hooks, letting Woody swing above perilous terrain (similar to Earthworm Jim and its whip mechanics).

The game occasionally changes genres for a stage. Players control R.C. in two stages: one in which Woody knocks Buzz out a window, the other in which they both race back to the moving truck. Both play largely the same; the game takes an overhead view of the level, giving the players basic acceleration, braking and steering, and tasking players with reaching the end of the stage while not running out of batteries (which drain constantly, but can be replenished by bumping them out of Buzz in the former stage, and merely finding them on the ground in the latter). The Mega Drive/Genesis version also has an exclusive level in which Woody rides R.C.'s back while rushing back to Sid's house to fetch Buzz; this stage plays very similar to OutRun, but has the same condition of maintaining a battery level. Lastly, one stage takes place in a first-person maze similar to Wolfenstein 3D, in which Woody must find alien squeaky toys lost inside the claw machine and return them to the play area, where the rest of the alien toys reside, all within a time limit.