The gameplay revolves around creating suitable exhibits for animals through habitat modifications (ground cover, water, elevation, foliage, and rocks, plus a variety of other items including food, shelters, and toys/enrichment items) which fulfill the animal's needs (habitat, hunger, thirst, stimulation, privacy, sleep, social, and exercise).

In Campaign mode, the player plays through scenarios in existing zoos and is assigned different objectives to complete, such as achieving a certain fame level, caring for rescued animals, or breeding endangered species.

The last mode, Sandbox, allows the player to create a zoo from scratch with unlimited money and access to all animals and items from the start.

[10] Publisher Microsoft Game Studios ran several promotions involving the game, including a competition allowing kids to "Become a Zoo Keeper for the day" in the UK,[11] and a competition to find "America's Favorite Zoo" in the US, an online vote which would result in a $25,000 grant from Microsoft to be put towards upkeep and maintenance.

[13] On October 18, 2005, Microsoft released Zoo Tycoon 2: Endangered Species, the first expansion pack for the game.

The expansion adds many new rare and endangered animal species, including the koala, gray wolf, Komodo dragon, scimitar-horned oryx, American bison, and orangutan, as well as a number of new forms of transportation, including sky trams, jeep tours, and elevated paths.

The expansion also has a feature called "variant skins", which means that when the player adopts an animal, it may look different from normal members of its species (such as a white tiger and King Cheetah).

It adds various new African animals such as the bongo, secretarybird, ratel, and meerkat, and allows the player to drive through exhibits with African-themed Jeep tours to get closer to them.

The expansion pack also includes new maps based on well-known African locations, as well as new desert-themed buildings, lizard live food, and a new set of challenges and campaigns.

It added four new extinct dinosaurs to the game: Tyrannosaurus, Triceratops, Carnotaurus, and Styracosaurus, as well as new objects to be used for them and a new campaign scenario.

Microsoft subsequently licensed the game to Ubisoft, who re-released the Ultimate Collection in a variety of formats across multiple territories including a single disk DVD-ROM for Windows PCs.

[28] At the following year's awards ceremony, the expansion Endangered Species received a nomination for "Outstanding Achievement in Gameplay Engineering.

[30] An enhanced edition titled Zoo Tycoon: Ultimate Animal Collection was released in 2017 for the Xbox One and Windows 10.