In the game, players explore a mysterious island and attempt to find and capture the eponymous insectoid food creatures.

Bugsnax is a first-person adventure game, in which players traverse the mysterious Snaktooth Island to find clues regarding the disappearance of a missing explorer.

When a Grumpus has returned to Snaxburg, they will begin asking the player for favors, which take the form of side quests, and reveal more of their personal history and motivations as each one is completed.

These side quests typically involve the player capturing specific Bugsnax and feeding them to the Grumpuses, which transforms parts of their bodies based on the properties of whatever Bugsnak they eat.

A "Snaktivator" device unlocked during the game allows the player to more heavily customize each Grumpus' appearance, such as selecting specific body parts to transform.

[4] A free update to the game in April 2022, titled The Isle of Bigsnax, added a new area to explore and 12 additional Bugsnax to collect for a total of 112.

Upon discovering the existence of Bugsnax, disgraced explorer Elizabert "Lizbert" Megafig (Helen Sadler) leads an expedition team to the island to study them, establishing the makeshift town of Snaxburg as a base of operations, but disappears under mysterious circumstances.

The player controls an unnamed newspaper journalist who is invited by Lizbert to visit Snaktooth Island over the objections of their supervisor, C. Clumby Clumbernut (Barbara Goodson).

Aiding the journalist is Filbo Fiddlepie (Max Mittelman), the self-appointed Mayor of Snaxburg who was left in charge by Lizbert before she disappeared, despite lacking self-confidence.

These include Wambus Troubleham (Fred Tatasciore), a stubborn sauce-farmer; Beffica Winklesnoot (Cassandra Lee Morris), a gossip-seeking photographer; Gramble Gigglefunny (Sam Riegel), a rancher who treats Bugsnax as pets instead of food; Wiggle Wigglebottom (Kenna Ramsey), a washed-up musician; Triffany Lottablog (Haviland Stillwell), Wambus's estranged archaeologist wife; Cromdo Face (Rick Zieff), a greedy entrepreneur and con-man; Snorpington "Snorpy" Fizzlebean (Roger Craig Smith), an inventor and conspiracy theorist obsessed with the "Grumpinati"; Chandlo Funkbun (Yuri Lowenthal), Snorpy's overprotective bodybuilder boyfriend; Floofty Fizzlebean (Casey Mongillo), Snorpy's antisocial scientist sibling; Shellsy "Shelda" Woolbag (Debra Wilson), an alleged prophet who preaches the evils of Bugsnax; and Eggabell Batternugget (Fryda Wolff), the town doctor and Lizbert's romantic partner who also went missing.

Intrigued, the journalist takes an airship to the island, only to discover that Lizbert has gone missing and all the other Grumpuses that joined her on her expedition have scattered due to interpersonal conflict.

Some of them believe that there is a secret conspiracy behind the island: Snorpy thinks that the "Grumpinati" are controlling the Bugsnax, while Shelda warns of their harmful "toxins".

These recordings reveal that the supposed "Grumpinati" are actually the Snakolytes, a secret order Jamfoot is a member of whose goal is to create a new Bugsnak Queen and gain control of all Bugsnax.

"[3] The initial idea was when the company's creative director Kevin Zuhn drew a sketch of a "Wafflepillar"—a caterpillar made out of waffles.

"[3] In addition to Pokémon Snap, the final game also takes inspiration from Ape Escape, Dark Cloud and Viva Piñata.

[12] In January 2021, Young Horses confirmed they were working on a followup to Bugsnax, but had not determined whether this would be a proper sequel or downloadable content.