The sequel to the surprise hit Super Smash Bros. on the N64, Super Smash Bros. Melee introduces more characters, stages, and moves to the mix. Returning to the fold is the entire cast of the original, along with a host of new combatants, including such popular Nintendo icons as Bowser, Zelda, Ice Climber, and Peach. In addition to the initially selectable cast, 11 other characters can be unlocked. These characters will challenge the player to a duel, and if defeated become unlocked for future play. Eighteen stages are primarily selectable, with a number of hidden ones becoming available throughout the course of the game.

Classic and Adventure modes make up the bulk of the single player experience. The former is set up in essentially the same format as the original N64 version, while the latter is more like a platform title and includes famous locales, such as the Mushroom Kingdom (replete with Goombas) and Brinstar. Interspersed between stages, and sometimes during the stages, are matches against various enemies, ranging from giant characters to team battles to one-on-one match-ups. Event matches provide the player with various situations that need to be completed within a predetermined set of parameters, such as rescuing Peach from Bowser, without either Mario or Peach getting knocked out of the stage. The Stadium mode includes Target Test, Home Run Derby, and Multi-Man Melee events, each of which provides rudimentary tests for the player.

Multiplayer matches can be made up of any combination of four human or CPU opponents, and feature a variety of gameplay modifiers ranging from invisible characters to instant kills. Newly added Coin Battle and Point modes complement the original's Time and Stock modes. Players can enter their names in order to keep track of such statistics as games won and lost, number of kills and deaths, time played, and characters used, among others.

Coins earned in any of the game's modes can be used to gamble for trophies of game characters, items, and power-ups from Nintendo's vast library of titles. The trophies include obscure mascots and long-forgotten characters; each of which can be inspected in real-time by the player using such functions as rotate and zoom to get a better view.