In a desolate and cruel world, two clans are fighting for domination: the noble Republic of Kriph, led by the warrior Kai, and the evil Holy Dark Empire, led by Alamis and the mysterious armored Götz von Dark. The player can choose to play as any of the good and evil characters (four for each clan) - but it is only possible to fight warriors of the opposing party.

Battle Heat!'s biggest innovation as a fighting game is the fact that every single move is viewed as a full-motion anime-style sequence. Each of the controller's buttons is assigned to a specific move (including jumping), and the moment the player presses it, it triggers the movie. The game features many different movies, including specific ones when, for example, a character is kicked down and immediately reacts with an attack of his own.

It is possible to play the game in a tournament mode (for Republic of Kriph only), or choose a free battle, which also makes it possible to play as the bad guys.