Each scenario has the same prologue. The USS Golgotha, a United States Colonial Marine Corps training space station built by Weyland-Yutani, detects a Predator ship and a Space Jockey Boneship landing on the station. All civilians (and USCMC recruits) in the area are evacuated and the colonial marines go into defensive positions to protect the base. The game then begins.
The game is a first-person shooter taking place on flat plane environments with two-dimensional sprites. Each player character has its own scenario, weapons, and abilities.
When playing as the Alien, the player's objective is to rescue the Alien Queen who is being held captive on a Predator spaceship. The player must fight numerous marines and Predators through various sublevels of the ship in order to reach the Queen. The Alien is unable to heal itself from injuries and instead "cocoons" marines; if the Alien dies a cocooned marine will become a new Alien, allowing the player to continue from that location. The Alien is unable to use elevators and instead travels through air ducts in order to travel between levels of the ship.
As the Predator, the player's objective is to reach and kill the Alien queen in order to claim her skull. The Predator uses elevators to travel between levels of the ship, is able to carry medical kits which it uses to recover health, and can use a cloaking device to become invisible. Weapons and scoring when playing as the Predator are based on how the player chooses to kill enemies. Killing an enemy while invisible results in a loss of honor points, which can in turn result in losing many of the player's equipped weapons. Killing an enemy while visible, conversely, results in an increase in honor points which in turn allows access to more weapons.
When playing as Private Lewis, the player's goal is to escape a military base which has been invaded by Aliens and Predators. At the start of the game, Lewis is in the base's brig and has no weapons, motion tracker, or security clearance. The player must find weapons and security cards in order to fend off enemies and access new levels of the base, activate the base's self-destruct mechanism, and escape in the escape pod. Lewis can use medical kits to recover health, but cannot carry them and must use them immediately. Available weapons include a shotgun, pulse rifle, flame thrower, and smart gun. As Lewis, the player can use both air ducts and elevators to access new levels of the base.
- The marine character, Lance Lewis, was "modeled" and named after the game's graphic designer.
- When cocooning a Marine, the Marine appears to undergo "Eggmorphing", similar to the Director's Cut version of Alien and the 1993 Alien vs Predator game for the SNES.
- The game was unique, as the player Alien character is unable to see cloaked Predators, whereas in the later games, the player could.
- Unlike the Predator, Lewis does not have to kill the Alien Queen, but may still do so if the player chooses to venture into her lair. The encounter is optional and has no bearing on gameplay.
- The game was considered to be number 4 on GT's countdown of the top 10 scariest games. The fact that nothing in the game makes noise for movement as well as numerous blind corners owe to the fear factor. This provides a jump-scare effect as the player does not know if an enemy is near until they are attacked from behind or an enemy comes charging around a corner.
The game was one of Atari's most high profile Jaguar games, and was highly anticipated before release. Reviews were generally positive, with the strong atmosphere and diversity of gameplay being highly complimented.