King's Knight is a vertically scrolling shooter, where the main objective is to dodge or destroy all onscreen enemies and obstacles. Various items, however, add depth to the game. As any character, the player can collect various power-ups to increase a character's level (maximum of twenty levels per character): as many as seven Jump Increases, seven Speed Increases, three Weapon Increases, and three Shield Increases. There are also Life Ups, which are collected to increase the character's life meter. To balance out the Life Ups, there are also Life Downs. Other onscreen icons can affect the stage, such as hidden cave entrances/exits and a "secret revealer," which reveals hidden stones that block progress. Finally, there are four types of elements to be collected in each level, which are vital to the completion of the last stage. These elements are simply elements A, B, C, and D. Each of these elements corresponds to a certain character.

King's Knight is often incorrectly credited both as an RPG and as Square's first development. Although featuring RPG elements, it fits more appropriately into the shooter genre and was in fact developed by Workss. It was, however, Square's first North American release under their Redmond subsidiary Square Soft, and their first release as an independent company.