Loom is an adventure game that sets itself apart from other titles in the genre through its unique gameplay system: the player character does not carry items around, but rather manipulates objects through the use of spells (called "drafts" in the game). The drafts themselves are woven by playing magical notes on a special instrument called "distaff". All the puzzles in the game are solved by learning and correctly applying these drafts.

Each draft is a sequence of four notes within one octave. The player learns new drafts by exploring the environment and interacting with it through a simple point-and-click interface. Once a draft has been learned, it may be applied in a different situation in order to solve a problem. Drafts range from simple general actions (such as opening) to more specific and complex commands, e.g. turning straw into gold. Drafts can also be "reversed", i.e. played backwards, in order to execute the opposite action (for example, closing something instead of opening). As the game progresses Bobbin learns to play higher notes on the distaff, allowing him to access more drafts.