Clockwork Knight is a game that depicts the secret lives of toys coming to life in the absence of humans. Betsy's toys have their own personalities and play nicely with each other, but things take a turn when a rogue toy kidnaps the princess who lives in the clock.
The gameplay consists of side-scrolling action through various stages made up of toys, traps, and household items. Pepperouchau, the clockwork knight, wields a key sword that can be used to attack enemies or open boxes to access warp zones. The game takes him on a quest through Betsy's room, her brother's workshop, and other areas of the house.
The stages are filled with obstacles like falling robots and sharp crayons, but Pepperouchau also collects coins throughout the levels. These coins can be used to continue playing when lives run out, with 20 coins being worth one extra attempt. Along the way, friendly toys offer the chance to gamble with earned coins.