Mother Nature needs Woody Woodpecker's help! Monsters have taken over the Fairy World and the Crazy Castle. With the promise of riches, Woody makes his way through many puzzling levels. Special powers given by Mother Nature, such as bow and arrows and a jet pack help Woody on his quest. Each level requires players to find eight keys, then reach the exit. New to the Crazy Castle series is the addition of Bosses at the end of each world.

Woody Woodpecker in Crazy Castle 5 also features a single-cart multiplayer mode where one player is 'it', and the other three players need to avoid being tagged. Players can also earn extra points if they catch Mother Nature, who pops up randomly in the levels.