Castle of Magic is a platform game where the player controls a young boy who has to rescue his friend who has been kidnapped by an evil wizard. The game contains five worlds with their own settings each with three levels and a boss fight. Similar to other platformers the boy has to run and jump across each level without falling or getting killed by various monsters. In most cases this can be done by jumping on their heads or attacking with a magic wand which transforms them into blocks of stone. The block can then be used as a weapon and pushed into other enemies. The player is by default a magician but can by picking up power ups transform into other characters such as a hunter with a bow or a sword fish for easier swimming while being underwater.
The DSi version of the game uses the handheld's camera. It allows the player to add custom photos to the game which replace some of the items or character graphics. The camera can also be used to get some power ups. The player then takes a picture and if it contains at least 50% of the required colors the power up will be awarded.