The gameplay is similar to Dragon's Lair, requiring the player to move the joystick or press the fire button at key moments in the animated sequences to govern the hero's actions.

Like Dragon's Lair, Space Ace is composed of numerous individual scenes, which require the player to move the joystick in the right direction or press the fire button at the right moment to overcome the various hazards Dexter/Ace faces.

A number of the scenes had "multiple choice" moments when the player could select how to act, sometimes by deciding which way to turn in a passageway, or by choosing whether or not to react to the on-screen "ENERGIZE" message and transform back into his Ace form.

Ace is on a mission to stop the villainous Commander Borf, who is seeking to attack Earth with his "Infanto Ray" to render Earthlings helpless by reverting them into infants.

However, Dexter has a wristwatch gadget which optionally allows him to "ENERGIZE" and temporarily reverse the effects of the Infanto-Ray, to turn him back into Ace for a short time and overcome more difficult obstacles in a heroic manner.

To keep the production costs down, the studio again chose to use its staff to provide voices for the characters rather than hire actors (one exception is Michael Rye, who reprises his role as the narrator of the attract sequence in Dragon's Lair).

In an interview about the game, Bluth stated that had the studio been able to afford more professional actors, he thought Paul Shenar would have been more suitable for the role of Borf than himself.

Early version #1 production units of the dedicated Space Ace game were actually issued in Dragon's Lair style cabinets.

The conversion kit included the Space Ace laserdisc, new EPROMs containing the game program, an additional circuit board to add the skill level buttons, and replacement artwork for the cabinet.

A sequel, Space Ace II: Borf's Revenge, was created and shipped on floppy disk for the aforementioned computer platforms mixing new animation with scenes from the original game that were left out of the previous version due to large file sizes.

However, since a SNES cartridge has limited storage, it ended up being a top-down perspective action game with levels based on the scenes from the original.

In order to see the credits, the player must get an "Ace" rank on every level, meaning that they must have near-perfect accuracy and collect all the disks found throughout the game.

[8][9] In July 2015, Rebecca Heineman released the source code from a reverse engineered Apple IIGS version (dating back from 1990) on GitHub.

[17] In their review of the Sega CD version, GamePro gave the game an overall score of 3.9 out of 5, remarking that the game 'unfortunately highlights the color bleeding of the Sega CD', but praised the story, voicing, and music, and concluded "Space Ace is great for animation buffs or gamers who enjoyed Dragon's Lair".

[19] A reviewer for Next Generation gave the PC version two out of five stars, commenting that "Don Bluth's LaserDisc classic remains an entertaining cartoon attached to the antithesis of interactivity.

It features terrific Don Bluth animation and an amusing plot involving the evil Commander Borf and his Infanto Ray.