With the help of Nights, an exiled "Nightmaren", they begin a journey to stop the evil ruler Wizeman from destroying Nightopia and consequently the real world.

Players control Nights flying through Elliot and Claris's dreams to gather enough energy to defeat Wizeman and save Nightopia.

Naka began the project with the idea of flight, and Ohshima designed Nights as an androgynous character that resembles an angel that could fly like a bird.

The team conducted research on dreaming and REM sleep, and was influenced by the works and theories of psychoanalysts Carl Jung and Sigmund Freud.

[10] The majority of the gameplay centres on flying sequences, which are triggered by walking into the Ideya Palace near the start of each level so that the character merges with the imprisoned Nights.

[13] The game features a combo system known as "Linking", whereby actions such as collecting items and flying through rings are worth more points when performed in quick succession.

[4] The A-Life system features an evolving music engine, allowing tempo, pitch, and melody to alter depending on the state of Nightopians within the level.

The evil ruler of Nightmare, Wizeman the Wicked, is stealing this dream energy from sleeping visitors in order to gather power and take control of Nightopia and eventually the real world.

I headed back to Japan so that I could work with Mr Ohshima and while I was waiting for the plane to take off, I thought, 'Let's make a game where we can fly!'

[24][25] Sonic creator and project director Ohshima created the character of Nights based on his inspirations from travelling Europe and western Asia.

[24] The initial concept envisioned the flying character in a rendered 2D sprite art, with side-scrolling features similar to Sonic the Hedgehog.

[26] The team were hesitant to switch from 2D to 3D, as Naka was sceptical that appealing characters could be created with polygons, in contrast to traditional pixel sprites, which the designers found "more expressive".

There were problems during early stages of development because of a lack of games to use as reference; the team had to redesign the Spring Valley level numerous times and build "everything from scratch".

[32] The team felt that the global market would be less resistant to a game featuring full 3D CGI cut scenes than 2D anime.

Norihiro Nishiyama, the designer of the in-game movies, felt that the 3D cutscenes were a good method to show the different concepts of dreaming and waking up.

[26] Naka limited the flying mechanic to "invisible 2D tracks" because early beta testing revealed that the game was too difficult to play in full 3D.

[28][34] The team researched dream sequences and REM sleep, including the works of psychoanalysts Carl Jung, Sigmund Freud and Friedrich Holtz.

[32] Because the Nights character was testing very young in focus groups, Sega used a nighttime scene for the cover art to create a more mature look.

[54][55] It was first previewed on Portuguese publication Maxi Consolas, after the release of short reveals from the Official Nintendo Magazine and Game Reactor.

[54] The gameplay involves the use of various masks,[57] and features a multiplayer mode for two players[54] in addition to Nintendo Wi-Fi Connection online functions.

[61] In Japan, Nights into Dreams topped the Japanese all-format games chart, despite increased competition from the newly launched Nintendo 64.

[9] Colin Ferris from Game Revolution praised the graphics and speed as breathtaking and awe-inspiring, concluding that it offered the best qualities of the fifth-generation machines.

[70] Next Generation criticised the speed, saying that the only disappointing aspect was the way "it all rushes by so fast", but the magazine praised the two-player mode and the innovative method of grading the player once they completed a level.

[68] Levi Buchanan from IGN believed that the console "was not built to handle Nights" due to the game occasionally clipping and warping, though he admitted that the graphics were "pretty darn good".

[11] A reviewer from Mean Machines Sega praised the vibrant colours and detailed textures, and described its animation as being "fluid as water".

Paul Davies from Computer and Video Games said Nights had "the best music ever"; in the same review, Tom Guise said it created a hypnotically magical atmosphere.

[89] In 2014, GamesRadar listed Nights into Dreams as the best Sega Saturn game of all time, saying it "tapped into a new kind of platform gameplay for its era".

It includes 16:9 wide screen support, an illustration gallery and features the ability to play the game in classic Saturn graphics.

[103][104] A minigame version of Nights into Dreams is playable through using the Nintendo GameCube – Game Boy Advance link cable connectivity with Phantasy Star Online Episode I & II (2002)[105] and Billy Hatcher and the Giant Egg (2003).

[108][109] The limited Deadly Six edition of Sonic Lost World (2013) features a Nights into Dreams-inspired stage, "Nightmare Zone", as downloadable content.