The gameplay is similar to that from Heavy Iron Studios' previous game, Battle for Bikini Bottom, as it was created using the same engine and shares many assets. There are 18 levels in the game that loosely follow the storyline of the film. The player controls SpongeBob SquarePants and Patrick Star, both of whom have their own unique set of abilities. Each level contains a main objective and side tasks. Four levels involve a boss enemy that the player must defeat to progress to the next level. Boss enemies include the giant frogfish from the film, Dennis (who is fought twice), and King Neptune. Each main level and side task will give the player a Goofy Goober Token once completed, and the player needs these tokens to learn certain skills and proceed to the game. Although the player only needs to complete a level's main component in order to unlock the next level, it is not possible to complete the game only doing the main levels (though the player does not need to do all of the side tasks).
There is also an upgrade system in the game. As the player collects "Manliness Points" (represented by glowing weights), they will learn new moves for SpongeBob and Patrick which are needed to complete the game. Once the player collects enough manliness points, they get an "Upgrade Point" which can improve a skill's effect (or be used to increase the player's Max Health from three to up to six units). Although very helpful in progressing and completing the game, upgrades are not mandatory to doing so.
The game does not use a life system; if the player dies, they are reverted to their last checkpoint, the game does not count deaths.
Platforming - The main levels of the game, the player, playing as SpongeBob or Patrick, has to navigate the level. Several skills such as combat, careful movement, and most notably, the use of SpongeBob and Patrick's move-sets are needed to progress. Each level has side tasks which offer a Goofy Goober Token, including;
Sonic Wave Guitar - The player has to use SpongeBob's Sonic Guitar (his fifth and last move) to guide the wave throughout rings without missing one.
Spongeball - The player must guide SpongeBob, who forms a ball, through a platforming area, similar to the Super Monkey Ball series.
Floating Block Challenge - The player must guide Patrick by jumping from block-to-block to reach the Goofy Goober Token before time runs out. Each block has different attributes.
Combat Arena Challenges - Playing as either SpongeBob or Patrick, with only a few health units throughout the level, the player must defeat waves of enemies.
Driving - Using the Patty Wagon, sometimes the player will need to drive through an area. All of the driving levels have three identical side tasks: a time challenge, a ring challenge, and a "Macho" (harder) time challenge.
Sliding - Using a small bathtub (a shell and King Neptune's crown) which acts almost like a sled with its movement, the player must slide through the area. The side tasks are the same as in the driving sequences.
Bosses - There are a total of four boss battles in the game, none of which contain side tasks.
Each completion of a challenge or its side task grants the player a Goofy Goober Token. In order to learn the moves required to advance in levels and the stories, SpongeBob and Patrick will have to complete these side missions (like the extra driving and minigame challenges) to get these tokens. SpongeBob and Patrick have a few moves, and when they get a sufficient number of points, they can upgrade a move or increase their max health. Their health units are measured in Krabby Patties; they each contain only three, but can be upgraded up to six over time. The moves will improve in effectiveness when upgraded.
Throughout the game are cutscenes that are either in-game animations or FMV sequences that resemble slideshows and feature stills from the movie.