Gameplay involves shooting down enemies, avoiding their projectiles, and collecting power capsules to unlock access to new weapons.

Players control one of four different starships — the Vic Viper, Lord British, Jade Knight and Falchion β[1][2] — in their mission to eradicate the Bacterian army before they destroy the planet Gradius.

[2] Gameplay itself remains relatively the same compared to previous installments; the player must complete each of the game's stages while shooting down enemies and avoiding collision with either them, their projectiles, or the terrain.

These weapons include missiles, a double shot, lasers, and glowing orbs known as "Options" that follow the player and will fight alongside them.

[4] Teisaku's goal was to refine and build upon many of the franchise's pre-existing concepts and ideas, while simultaneously providing an exciting and new experience for shooter fans.

[3] This also allowed them to experiment with different ideas; while the name Gradius IV was considered, it was dropped to prevent them from sticking only to mechanics established in earlier installments.

[4] Teisaku and his colleagues retained elements they considered fun to use and "essential" to the series, namely the power meter system.

[4] The Lord British, the second-player ship from the Gradius spin-off Salamander, was added to accompany the default Vic Viper.

[4] The development team toyed with the idea of a "sea of mud" level that slowed down the player's ship, which was scrapped for it not being fun to play.

[6] Gradius Gaiden is one of twenty games included in the Japanese version of the PlayStation Classic mini console, released in 2019.

[9] Lord Mathias of Super GamePower found them to be well-designed and vibrant, and posing some impressive transparency and rotation effects;[11] a writer for Ação Games agreed.

Johnston said the balanced difficulty and fun mechanics made it a solid entry in the franchise, with Ação Games agreeing.

[9][12] Super Juegos enjoyed its style and innovation for building on the Gradius gameplay in a way that made the game feel fresh and new; they favorably compared it to Konami's own Castlevania: Symphony of the Night for this reason.

[12] The level design was also the subject of praise for its creativity and originality,[12][11] although Famitsu staff felt it relied too heavily on Gradius fan service.

[17] In a 2017 retrospective review, Kurt Kalata of Hardcore Gaming 101 labeled Gaiden as "The perfect example of how to evolve the series", and the Gradius equivalent to Castlevania: Symphony of the Night.