Cadash is an early example of what would become a fairly common trend in Japanese-made arcade games of the early 1990s: the "platform-RPG". Cadash borrows many principles of Zelda II: The Adventure of Link's gameplay, combining side-scrolling platform action with an RPG system of statistics, levels, money and magic.

Four characters can play at once in the arcade version, and up to two players may select from four different characters in the console versions: fighter, mage, priestess, and ninja, each with different attacks, statistics and skills. Players then proceed through each level, killing monsters and bosses, collecting keys to unlock doors and collecting gold and experience. Gold is also taken from slain foes and treasure chests. Villages sell items, weapons, armor and (in the console versions) extra lives, with each village encountered providing better equipment. Some villagers and benevolent creatures will also provide information. The arcade version has a limited game time, which can be extended by buying progressively more expensive hourglasses at shops, or by picking up rare bonuses. In shops, and in hidden places, are medicinal herbs which restore 10 HP if brought to zero, and antidotes which cure poison inflicted by specific foes. There are also two elixirs in the game that act like medicinal herbs, except that they restore all HP.

There are five stages in the game. Stages one, two and four consist of two worlds, above and below ground. Stage three consists of three worlds. Stage five is set entirely within Castle Cadash. The environments differ significantly, from pleasant meadows to caves, and from forests to underwater environments. Some foes encountered in these levels are derived from common mythology while others are completely made up for the game.

The game setting is a medieval fantasy world similar to that of the high fantasy seen in The Lord of the Rings. The demons and abominations of nature who reside in the underground kingdom of Cadash have not forgotten that, thousands of years previously, they once shared the light with humans. Then one rose among them who was especially powerful, a demonic wizard born of a human woman – the Balrog (Baarogue or Baalogue in the arcade version, and Barlog in the TurboGrafx version). The Balrog promised his followers they could, in time, emerge from their subterranean prison and rule the world of men, taking revenge on humans for their prior defeat in battle and subsequent exile, if the Balrog could mingle his blood with that of a human king. The Balrog and his demonic armies gathered in force over the centuries, and are now powerful enough to emerge to the surface and make war with the unprepared human kingdoms which had not known war for millennia, all of which quickly fall to the Balrog. The human world is almost entirely laid to waste by the Balrog. However, this was not enough for the Balrog, whose prize is the mightiest of all human kingdoms, the Kingdom of Dirzir. One night, the beautiful Princess Salassa is kidnapped by the Balrog from the Keep of Deerzar, the capital city of Dirzir, and taken underground to the dreaded Castle Cadash. There the Balrog plans to initiate the ritual which would magically bind himself to the human princess, becoming all-powerful and invincible. Dilsarl, the distraught and helpless elderly King of Dirzir, has vowed to give his entire kingdom to the one who would rescue his beloved only daughter, and many brave heroes have disappeared into the depths of Cadash on this quest.