Ultima VIII: Pagan begins where Ultima VII, Part Two: Serpent Isle ended. The Guardian banishes the player, the Avatar, to the land of Pagan, a world under his control. Stranded in this unknown land, without his companions to help him, his goal is to find a way back to Britannia. The Avatar has to confront four Titans in this world who are embodiments of the four elements. He has to master different styles of magic and fight many opponents on his way.

Gameplay in Ultima VIII: Pagan is more action-oriented than in previous Ultima games. The Avatar is able to jump and climb and some puzzles are based on these abilities. Combat is in real-time and also based on dexterity. There are four different magic systems in the game.

A speech pack was released separately, which added voices to some of the major game characters. It was included in the CD-ROM edition of the game.