The player's goal is to descend to the depths of Moria to defeat the Balrog, akin to a boss battle. As with Rogue, levels are not persistent: when the player leaves the level and then tries to return, a new level is procedurally generated. Among other improvements to Rogue, there is a persistent town at the highest level where players can buy and sell equipment.

Moria begins with creation of a character. The player first chooses a "race" from the following: Human, Half-Elf, Elf, Halfling, Gnome, Dwarf, Half-Orc, or Half-Troll. Racial selection determines base statistics and class availability. One then selects the character's "class" from the following: Warrior, Mage, Priest, Rogue, Ranger, or Paladin. Class further determines statistics, as well as the abilities acquired during gameplay. Mages, Rangers, and Rogues can learn magic, while Priests and Paladins can learn prayers. Warriors possess no additional abilities.

The player begins the game with a limited number of items on a town level consisting of six shops: (1) a General Store, (2) an Armory, (3) a Weaponsmith, (4) a Temple, (5) an Alchemy shop, and (6) a Magic-Users store. A staircase on this level descends into a series of randomly generated underground mazes. Deeper levels contain more powerful monsters and better treasures. Each time the player ascends or descends a staircase, a new level is created and the old one discarded; only the town persists throughout the game.