The game features worlds significantly larger than those of its predecessor, requiring the player to complete challenges such as solving puzzles, jumping over obstacles, collecting items, and defeating opponents.

It also includes a Widescreen format, and a multiplayer mode in which up to four players can compete in several minigames repurposed from the main campaign.

[1] Similar to its predecessor Banjo-Kazooie, Banjo-Tooie is a single-player platform game in which the protagonists are controlled from a third-person perspective.

Among the items are golden jigsaw pieces, called Jiggies, that are used to permit entry to new worlds; instead of exploring the game's overworld in search of incomplete puzzle boards as in Banjo-Kazooie, a singular board is used within a temple where a character named Master Jiggywiggy resides, that can only be accessed if the player has obtained the number of Jiggies required to open a new world.

Mumbo Jumbo reappears in this game as a playable character who can venture out into each world and use specific magic spells to help Banjo and Kazooie.

[2] In addition, a train named Chuffy can be used to migrate Banjo, Kazooie, and some minor characters between worlds which contain stations.

Outside, two of Gruntilda's sisters, Mingella and Blobbelda, use their large HAG 1 digging machine to enter Spiral Mountain.

Banjo and Kazooie continue their journey, meeting new allies along the way such as Bottles' drill sergeant brother Jamjars, who teaches them new moves, and the Native American shaman Humba Wumba, a bitter rival of Mumbo who aids the duo with new magical transformations.

The two return to Bottles' house with Jamjars, Mumbo, and Humba Wumba, to find that, much to their disappointment, the celebration has ended without them.

[6] Some features that were originally cut during the development of Banjo-Kazooie, such as some of its worlds and a multiplayer game mode, were instead integrated into Banjo-Tooie.

[7][8] An additional world set in a castle was planned, but due to time constraints, it was scrapped during development and assets from it were used in constructing Cauldron Keep.

[11] Originally, Rare planned to include an additional mode called "Bottles' Revenge" in which a second player could play as an undead version of Bottles and take control of enemy characters, including bosses, to hinder the duo in their quest, with the players swapping roles if the enemy character managed to defeat Banjo and Kazooie.

Due to the game having larger memory space, Kirkhope was able to combine two MIDI files to channel different fades of music when the player moves to different locations.

[30] N64 Magazine editor Mark Green felt that, although Banjo-Tooie delivers "a decent complement of clever puzzles and enjoyable run-and-jump moments", it did not feel "as fresh or as exciting" as previous Rare platformers.

[28] The graphics were considered some of the best on the Nintendo 64 due to their rich textures, long drawing distance, and real-time shadow generation, but were criticised for their inconsistent frame rate during certain points in the game.

[2][3][4][29] Nevertheless, some critics agreed that the occasional frame rate drops do not hinder the gameplay nor detract from the game significantly.

[27] GameSpot praised the game's level design and progression for constantly requiring players to collect Jiggies.

[37] Using the Stop 'N' Swop items in the Xbox Live Arcade version of Banjo-Tooie also unlocks additional bonuses in the "L.O.G.

[38] The Xbox Live Arcade version of Banjo-Tooie received mixed to favourable reviews from video game critics, featuring an aggregate score of 73 out of 100 at Metacritic.