The Caverns of Freitag is an action-based RPG where the player controls the warrior on his way to kill the dragon. The many monsters of the labyrinth can be destroyed using either a sword or a bow. Arrows are limited, however, and must be purchased at an inn from gold left behind by vanquished foes. Also at the inn, the warrior advances in levels and hit points according to experience gained from killing enemies. In addition to the weapons, the warrior can employ a magic spell which doubles his speed, and can only be used to run from enemies.

The game has three different display modes: in the standard mode, the screen displays the maze and the monsters in detail. It can be changed to an overview mode which shows the maze and monsters in a small window and adds detailed character statistics and messages. Finally, a magic map can be employed to display a larger section of the maze, with the disadvantage that monsters are not visible.