SpongeBob's Truth or Square follows the story of SpongeBob, who has been entrusted with Mr. Krabs' secret recipe for the Krabby Patty. However, in the excitement, he loses it and must now rely on Plankton's help to find it. Plankton uses his memory machine to locate the recipe by using the happiest moments of SpongeBob's life.
Gameplay involves exploring various locations in Bikini Bottom, including the jellyfish fields and the Krusty Krab diner, while encountering characters from the series. Players can also transform SpongeBob into different forms, such as a sledgehammer or explosive cannon, to defeat enemies. Additionally, players can team up with a friend to play co-operatively over a split screen game.