James Pond has to solve puzzles to defeat the enemy and the gameplay revolves around finding objects to perform specific tasks, such as keys to rescue captured lobsters, or sponges to bung up the holes in leaking oil tankers. James must also fire bubbles at his enemies to trap them, before popping them to finish them off.

A nefarious supervillain named "Doctor Maybe" (a play on Dr. No) has overtaken the ruthless megacorporation Acme Oil Company, and is not only filling the oceans with radiation and toxic waste but even threatening all the world from his underwater lair. The protagonist of the story and player character of the game is an intelligent, mutated anthropomorphic mudskipper who is given the name "James Pond" (after the legendary spy James Bond) and hired by the British Secret Service to protect the seas and take out the bad guys in underwater areas. He is also suave enough to seduce numerous attractive mermaids, some of whom act as double agents as is common with James Bond's love interests. The game spoofs James Bond movies with levels mimicking their titles, with level names like "License to Bubble" (after Licence to Kill), "A View to a Spill" (after A View to a Kill), "Leak and Let Die" (after Live and Let Die) and "From Three Mile Island with Love" (after From Russia with Love).