An evil Witch Queen called Queen Bavmorda is after the holy baby of the lands, Elora Danan, intent on destroying her. A young peaceful wizard called Willow Ufgood was selected to protect Elora. Later on, a brave warrior named Madmartigan joins Willow to fight the enemy rival General Kael.

The arcade version of the game belongs to the platform genre. It has six stages, some where Willow plays his part, others where Madmartigan plays his and one of the stages where either character is selectable. Move the joystick left or right to move in that direction. Press the A button to use a weapon. Hold down the A button and let go to fire stronger shots indicated on the magic power gauge. Press the B button to jump. While jumping press the B button and move the joystick up to haul up ledges. Press the B button and moving the joystick down the player can descend ledges or slide on other surfaces. Chests can be smashed open to reveal useful items. Collect gold for purchasing items at shops from the Owl Mage. Purchasable items include weapons, healing potions, defensive jewellery, a life pack, a 1 up and some information. Depending on whether the player is playing as Willow or Madmartigan determines if either the magic weapon or the blade weapon can be purchased. There are also sub-bosses in some stages. At the end of each stage, stage boss must be defeated to proceed.

The version of Willow released for the Nintendo Entertainment System and the Famicom is an adventure game in the vein of The Legend of Zelda. The game has the player taking on the role of Willow. Unlike the film and arcade game, Willow generally travels alone, only briefly meeting other characters. In the tradition of The Legend of Zelda, Willow wields a sword and shield and many supplementary items along with a wide variety of magic spells. As the game progresses and Willow defeats enemies, he gains experience points and levels as in a role-playing video game.