Nicktoons Racing is another Mario Kart clone using cartoon characters from Nickelodeon. The gameplay follows the standards closely: the player controls one of the characters to win races on tracks filled with scattered power-ups and ramps. A meter at the top of the screen shows the current position and the amount of nitro fuel available. Extra fuel can be collected as shiny orbs on the road. The gift boxes contain random power-ups, like coconuts to throw at the other racers, flash lights to temporally blind them, and traps like baby powder, trash cans and green goo to slow down the competition.

The game has four modes for single player. The main cups mode is the championship, where the objective is to arrive at least in third place to qualify for the next race. In time trial mode, the goal is to complete laps as fast as possible, with a ghost car showing the fastest performance to be surpassed. Race for fun is a practice mode, where any of the tracks can be explored without the pressure to win. In relay mode, the player switches characters after each lap.

There are three modes for multiplayer. The cups and relay modes are similar to their solo counterparts, but splitting the screen horizontally in the middle to show the two players. The versus mode is the "one on one" mode, where two players compete directly against each other without any other racers.