The player takes the role of a Ferrari team driver with the objective of becoming an F1 Champion during the 16-round season. The player competes against 25 computer opponents representing different F1 teams. Every round consists of a qualification race and a main race, with the qualification race determining where the player's vehicle will be placed at the beginning of the main race.
The player is rewarded points based on their finish position in each main race, with more points given for higher positions. The player can also make pit stops to change tires and refuel, involving a minigame. Additionally, there is a practice mode where the player can choose the number of practice laps they wish to complete.
Ferrari Grand Prix Challenge features racing gameplay on the GameBoy console.