Punch Ball Mario Bros. is a single-screen action game adapted from the 1983 arcade game Mario Bros.. Visually and structurally, the game is quite similar: enemies emerge from pipes at the top of the screen, and must be knocked over and kicked off the stage. Enemies that reach the bottom will enter a pipe and return to the top. The last remaining enemy on the stage, as well as any enemy left knocked over for too long, will change color and move faster. However, unlike the original game where Mario must flip enemies by hitting the platform they're on from underneath, in Punch Ball, Mario (and optionally a second player as Luigi) carries a red ball which can be thrown at enemies to knock them over. The ball must be picked back up after being thrown.

Every few stages, there is a bonus coin round with no enemies. Most stages also feature a POW block in the center, which can be hit a limited number of times to flip every enemy on the screen. There is also a small pit in the center of the screen at the bottom, into which Mario can fall if he isn't careful. One or two players can play the game simultaneously.