Gameplay is a cross between the third-person action RPG genre, and the real-time strategy genre. At its core the game revolves around controlling the minions and making them kill enemies, remove obstacles and solve puzzles, at the same time you move the main character directly and can level him up with magic and spells. As the Overlord gains more power he can summon more and more minions, and even summon different kinds of minions that take on more specialized tasks. The Overlord also gains magic spells that can be used to aid the minions or attack enemies directly.
As the game is about reclaiming your status as the Overlord you're responsible for rebuilding and decorating your destroyed tower. Using items and rewards received by completing quests and pillaging the villages you rebuild the tower and can place special items such as statues where you want.
The developers have incorporated a moral aspect to the game as well. Actions and decisions you take are judged as being "good" or "evil" and depending on which course you go has certain consequences. Your tower and looks of the Overlord reflect the moral path chosen as the evil path makes your tower more spiky, and the Overlord have a dark and brooding appearance. Depending on which path you choose will determine which of the two endings you will receive.
An online portion has also been included in the game. There are three different modes: a direct one-on-one head to head deathmatch; a co-op mode where you and a partner take on an army of enemies; and a pillage mode where you and a friend compete over how badly you can pillage a village.