Sonic & Sega All-Stars Racing follows Sonic and friends as they thwart Dr. Robotnik's plans to exploit the power of Chaos, a malevolent being that feeds on the power of the Chaos Emeralds. The heroes must each contribute their unique skills to save Station Square and possibly the world.
The gameplay revolves around racing through levels as quickly as possible, with various characters having distinct versions of each level. Players can select from Sonic, Tails, Amy, E102 Gamma, and Big the Cat, each with their own objectives and challenges. For instance, Sonic must destroy robots while racing, while Tails focuses on beating opponents to the finish line.
Throughout the game, players can collect items that enhance their characters' abilities, such as rings for increased speed or improved fishing lures. Additionally, each character has access to the Chao garden, where they can raise baby Chaos and strengthen it by interacting with various animals found in levels. Completing objectives in each level unlocks extra emblems, which do not provide any benefits in this version of the game.