The game offers two playable characters, nonlinear gameplay, multiple endings, and a large number of side-quests and secrets.

However, there is only one ball "material" and different abilities must be gained by flowers that bestow temporary power-ups which are only usable in Sprite form, a new feature introduced in Underground.

There are no hostile characters or antagonists in the story except for robots that follow a preset behavior and are confined to the room they spawn in.

There are different factions within the subterranean world such as the mystical Myriadists and a group called the Internet dedicated to salvaging human artifacts.

The player controls Mi Sprocket, a "sprite" who sets out to make a wish at the Fairy Springs, but due to her inability to speak, she is misunderstood by everyone and unwillingly recruited into a mission to save the world.

Mi's primary goal involves ringing the Six Bells of Fate, a task which falls upon a member of the Sprocket family every six hundred years and is required by prophecy to prevent the destruction of the world.

Besides Nifflas' own songs, Knytt Underground includes music by D Fast, David Kanaga, Fredrik Häthén, LPChip, Jonas Mattebo, Stephen Ascher, Void Pointer, and Yann Van Der Cruyssen.