Aquanaut's Holiday: Hidden Memories, players explore a fictional oceanic atoll using a submarine. The game follows a story centered around a research station and its employees, Jessica Porter and Robert Kemelmann, with players assuming the role of a journalist in search of a missing researcher. Dialogue drives the narrative, unlocking new areas and taking a slightly futuristic turn.

The primary objective remains ocean exploration and species discovery. To progress in the story, players must locate specific places like mysterious stones and activate sonar buoys using batteries, purchased with money earned by discovering creatures. Special buoys for fast-travel can also be bought, allowing players to jump to the research base.

Unique fish in each area emit sounds to help players locate them. After approaching, players engage in a Simon Says mini-game to earn red slime, used to upgrade the submarine's speed, agility, battery/buoy capacity, or unlock photo-taking abilities. The submarine has no impact on its surroundings, being invisible to sea creatures and incapable of collision. The game also features an in-game encyclopedia cataloging encountered areas and creatures.