In the game, players take part in illegal street races that focus on different styles of races, utilizing a variety of licensed real-world cars (available at the time of the game's development and release) that can be upgraded and customized with new parts, while contending with the involvement of the police in their efforts to impede the player.

In addition, Undercover includes new events such as "Outrun" - players must overtake a rival and stay ahead of them for a period of time - and "Highway Battle" - similar to Carbon's "Duel" and Underground 2's "Outrun" event, players attempt to stay ahead of a rival on a highway, battling against both them and local traffic, winning instantly if they pull far ahead and losing for the exact opposite - with its game modes consisting of Career, Single Event, and Multiplayer; both the PlayStation 2 and Wii editions also feature a fourth mode, Challenge Series, which operates similar in function as in Most Wanted and Carbon.

In Career mode, players take on the role of an undercover police officer seeking to break up a syndicate operating within the underground street race world.

Earning enough experience levels up the player's Wheelman level, unlocking a larger performance bonus, new cars and upgrade parts, as well additional events including Jobs - special story-based missions in which the player must complete a specific task such as taking down a criminal's car.

The game features a wide variety of licensed real-world cars which are divided into three tiers of performance and four classes - Exotic, Tuner, Muscle, and Sport.

For online multiplayer, events consist of multiplayer versions of Sprint racing and Highway Battle, along with a team-based event entitled "Cops and Robbers" - two teams of players compete against each other to score points across two rounds; in the first round, the "Robbers" collect flags and deliver them to specified areas to score points, while the "Cops" attempt to arrest them to earn points, whereupon in the second round, the teams switch roles, with the team with the highest score winning the match.

The game's story and events take place in the fictional region of the Tri-City Bay, mainly during the daytime between sunrise and sunset.

The region consists of four boroughs - Palm Harbor, a downtown city district; Port Crescent, an industrial port that also houses a naval base; Gold Coast Mountains, a mountainous region of observatories and wind farms; and Sunset Hills, a suburban town with rural farms - with each borough linked to the other by a series of highways.

The player achieves this by being recruited into a gang that works with the syndicate, run by Hector Maio (Kurt Caceres) and his brother Zack (Joshua Alba).

With Hector's gang out of action, the player is sent to Sunset Hills in order to get recruited by a crew operated by Gregory "GMAC" McDonald (David Rees Snell) - a former TCBPD police officer - Rose Largo (Heather Fox) - an honor student who turned to crime - and Brad "Nickel" Rogers (Lawrence B. Adisa) - a former boxer.

Chau quickly contacts the player the moment they take possession, and receive instructions to deliver it to a warehouse, learning that he knows them to be a police officer and that they have kidnapped Chase to coerce compliance from them.

"John Doyle (Developer at EA Black Box) said that Undercover would feature a brand new game mechanic and a 'Most Wanted-ish' sandbox style of gameplay.

[29] The IGN review was critical of the PS3 version of Undercover giving it a 4/10, calling it a "poor game with a ton of problems"[33] and with "practically no redeeming qualities".

[22] In general, sparse traffic, wide-open roads, and poor AI led to complaints about extremely low difficulty, however, one reviewer commented on how this may have been a marketing ploy to target a wider audience.

[23][28][29] The reception to the live-action cutscenes was almost universally negative, with many critics noting that the videos were poorly acted and lacked purpose.