The majority of the levels feature Little Red Hood in a forest filled with goblin-like enemies. Little Red Hood must avoid these enemies while attempting to reach the next stage.
Little Red Hood can jump over obstacles and perform a kick during the game, however the latter is ineffective at dealing any damage to any enemies.
In each level there is flashing staircase which appears randomly, leading the player to a room with some enemies, treasures and a key. Upon collecting the key Little Red Hood must go back up the staircase to the forest and collect at least twelve pieces of fruit (which fall from the trees when kicked) to make a non-flashing staircase appear which leads to the next stage.
In the forest segments, aside from the goblin enemies, Little Red Hood encounters new enemies as the stages progress such as hedgehogs and snakes. Larger enemies that guard the key, such as The Big Bad Wolf and the Bear cause instant death upon contact while the smaller ones damage Little Red Hood's health, which is represented by hearts. Little Red Hood is invulnerable for a brief period of time after taking damage, which is required to go behind the Big Bad Wolf and the Bear. Little Red Hood can get past them without taking damage from an enemy, but they will still kill her as she is behind them.
By kicking rocks Little Red Hood can find useful items such as money (which is represented by gold crowns), health regenerating candy and a white dog which wanders the area, killing any small enemies it comes in contact with. However, enemies may appear from under rocks instead. Occasionally a balloon will appear which will take Little Red Hood to a bonus area in the clouds filled with gold crowns.
There are multiple stores scattered throughout the forest (which all sell the same three items) which Little Red Hood can enter and, using the crowns obtained through gameplay, buy either a potion which gives temporary invincibility, a heart which restores one point of health or a slingshot which fires a projectile (itself).
World 5 takes a different approach from the usual forest segment and instead requires the player to guide Little Red Hood, who swims through an underwater level and must find two pearls while avoiding enemies such as fish.
In World 8, the key will not appear in the staircase segment until Little Red Hood has obtained an invincibility potion and three slingshots from the shop.
On completion of World 10, the player is rewarded with a message saying "Oh!My dear Little Red Hood! Thank you for your coming!" showing Little Red Hood running toward her grandmother.
A 2 player mode exists but is unfunctional upon selection on a normal NES console. However, playing the game on an emulator that has the option to bypass illegal opcode (meaning it can bypass small errors in the game, but not big) will allow you to access 2-player mode (in a Super Mario Bros. multiplayer style, where each character takes turns playing). The 2nd player looks like player 1 (red), but in a frozen flashing state based on the invincibility potion (green). Otherwise, the 2nd player still functions like the 1st player, and can go into all the same levels and areas as 1st player without trouble.
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