A toxic spillage on a cargo vessel has contaminated its stock, and a droid controlled by the player must rectify the situation. Initially the cargo is toxic to the droid's touch, but a quick shot with your decontamination gun resolves this. Once they are safe they can be shot across the level using your gun, to eventually reach the area in which your spaceship is parked. Fully load it to move on to the next level, in a manner reminiscent of Jetpac.

Don't Panic takes place on a succession of multi-level side-view looping levels, each with elevator squares which your droid can use to move up or down a level. Your droid can only cross past the ship at the bottom of the screen. There are indestructible enemies to deal with, mutant toads can be shot but the alien defenses can't, so be prepared to go up and down to dodge these.