The game features two game play modes: tournament and practice. Tournament mode consists of 12 rounds, each with 18 holes of golf. There are three different golf courses, one each in the United States, Japan, and Great Britain (although the background and the scenery does not vary). As the player progresses in the tournament mode, their skill level is increased allowing them to hit the ball farther with greater control. They can also upgrade their golf clubs from the initial black carbon club set, to glass fiber and ceramic clubs. This also increases the distance the player is able to hit the ball. Arnold Palmer Tournament Golf has no save feature, but instead provides a password after each round of the tournament that allows the player to pick up where they left off.
In practice mode, one or two players can play a complete 18 rounds of golf on one of the three courses. Each player can set their skill level and use any of the three golf club sets available in the game.
Before each turn, the player's caddy will give advice based on its skill level. At first, the caddy can only give the distance from the ball's current position to the tee. As the game progresses, more skilled caddies can give distances to various landmarks and information about how the ball is lying. The player then selects which club to use during the shot. After this, the player can adjust their golfer's stance in order to shank the ball in one particular direction based on the direction of the wind (all golfers in the game are right-handed).