Cowboyana tells the tales of Billy Blue and Rufus Red as cowboys in the Wild West. They spend their days drinking, getting into fights and duels, sleeping, and running around on top of trains. The game requires two players to play at the same time. The game randomly loads any of the available sequences in a loop with no ending. After each sequence, a short impression in shown in text.

In the drinking game, players both control the same bottle as they try to down as many drinks as possible. They can hinder each other and generally spill half the bottle on the table. At any point during the drinking, they can decide to draw their guns and start a duel. In other sequences, they either fight alone or together, in the desert or on trains. The characters can move around, jump, shoot and reload.