Digimon Medley is based on the popular manga and and anime series Digimon, in which ordinary Japanese children find a way into a digital world, where they help good digital monsters fight against evil ones. The game is not directly plot-related to Digimon Adventure or Digimon Tamers: Brave Tamer games. Instead, it follows more closely the actual episodes of the series. You play as various characters, such as the main hero Taichi and his friend Yamato from the first episodes, as well as heroes from the Digimon Tamers sub-series: Takato, Ruki, and Lee. The game is divided into short episodes, each one of which revives one of the battles in the series. You start with Digimon Tamers, as they venture into the DigiWorld, only to meet the enigmatic digimon named Impmon, who is up to some mischief.

Each episode can be played as one of several available characters. Each character also has his/her own digimon who fights all the battles. The battles are random and occur while you are navigating your heroes through top-down dungeons. The attacks are displayed as short animé-style sequences. During your turn, you must press the A button repeatedly to increase the power of your attack. The enemy attacks simultaneously, and you have to invest enough power in your attack in order for it to connect.