ModNation Racers is a mix of the kart racing aspect of Mario Kart and the customization of LittleBigPlanet. The player starts out as T.A.G., an up-and-comer in the MRC series, with his mother as a sponsor and a washed-out racer for a crew chief. As he rises through the ranks, he meets various interesting characters, both good and bad. Through the game, players will be acquainted with the controls and some aspects of the game, including weapons like rockets, sonic weapons, lightning weapons, and boost power-ups. These weapons can be picked up from item pods scattered throughout the track, and each has three levels that upgrade as the player collects more pods.
The gameplay of ModNation Racers involves racing against opponents in various tracks, both custom-made by players and pre-designed by the game developers. The creation aspect of the game allows players to modify their racers and karts, unlocking new items through the career mode or using tokens earned from completing challenges and finding item pods on each track.
Players can also create their own tracks using various tools, sculpting the landscape to their liking and sharing them with the world. The ModSpot serves as a central hub where players can view top racers and karts, connect with others in real-time, set up races with friends, or enter creation studios to build new content.