Dynamite Headdy is an innovative platform game that places players in control of Headdy, a puppet character with the unique ability to detach his head. This head can be launched in eight different directions to combat enemies and overcome obstacles, as well as retrieve items that are otherwise out of reach. The game introduces various mechanics through the use of HangMan, which allows Headdy to navigate vertical spaces by pulling himself up or dragging objects towards him. Players can also discover HeadCases, which provide Headdy with special head types that enhance his offensive or defensive capabilities, adding a strategic layer to gameplay.

The game features a wide variety of head types with different abilities, such as offensive heads that increase attack power or support heads that offer invulnerability and health recovery. Most special heads have a time limit, creating a dynamic gameplay experience where players must adapt quickly. Additionally, Dynamite Headdy includes side-scrolling shooter stages, providing further variety and allowing players to switch between three unique head types, enhancing the overall action-packed experience.