RPM Racing was preceded by Rareware's R.C. Pro-Am in 1988 and Electronic Art's Racing Destruction Set in 1985, with the latter being the larger influence. It is a precursor to Rock 'n Roll Racing, which was done by the same developer. The gameplay of RPM Racing involves racing on various tracks with different terrain types, including pavement, dirt, ice, flat, and bumpy surfaces. The game features three vehicle types that perform differently on each surface type. Players can choose from various upgrades such as oil, nitro, and mines for their vehicles, as well as different tire levels, engines, shocks, and armor.
The game offers multiple modes, including a full race season, single race, and custom track modes. In 1 player games, the second player is replaced with one of eight AI opponents who are each associated with their own vehicle. There are 128 total tracks in the game, and players can choose from different racing classes with varying fees and prizes.
In season mode, players can compete for cash prizes by placing first in races, with lesser placements earning smaller prizes. Players can also upgrade to a higher racing class for additional fees, which offers bigger prizes but requires a fee every time it's used. The game allows players to customize their tracks with varying terrain types, lap numbers, gravity levels, and starting line types.