Yuri Sakazaki has been kidnapped! Yuri's brother Ryo Sakazaki heads to South Town on his motorcycle looking for clues about his sister's whereabouts, while Robert Garcia, Ryo's friend and rival, also looks for Yuri, but in his stylish sports car. Only those two characters are selectable in the single-player Story Mode that includes three sub-games: a bottle cutting game, an ice block smashing game, and a game where players must perform five special attacks within an allotted amount of time. Each game completed successfully gives the character a bonus in a certain attribute for the rest of the game. Six other controllable characters are available in the two-player Versus Mode.

In addition to the standard health bar, characters also have a chi bar, depleted every time the character uses a special move, or whenever the other character taunts. The chi bar adds a unique element to fighting by directly relating the power and range of special techniques to the length of the character's chi bar. A full-bar fireball will traverse the entire screen, while a depleted-bar fireball will barely clear the character's outstretched hand. A recharging technique replenishes the bar.

Played from a side-view 2D perspective, Art of Fighting takes advantage of the Neo Geo system's sprite scaling capabilities by having two zoom levels in the fight. When characters are far apart, the view zooms out to give a sense of distance, and when the characters move closer together, the view zooms in to provide a feeling of proximity. ~ Kyle Knight, All Game Guide