Highway Encounter is a strategy/action game played from a 3D isometric perspective in which you must successfully chaperone a bomb along a long, straight stretch of highway and into the alien base at the end of it. There are thirty screens to pass through and most are filled with hazards that threaten to block your progress (such as barrels) or destroy you (aliens and explosive mines).

Players control a robotic "Vorton" (resembling a dalek from Doctor Who) and one of the things that provides Highway Encounter with its unique appeal is that the bomb is constantly being pushed onwards by your extra lives - four more Vortons, who accompany you along the highway. A key strategic element to the game is for the player character to travel several screens ahead of the bomb to clear a safe path for it; normally this would be done by temporarily blocking the bomb's forward motion. However, if the bomb is left in an unsafe location, it is possible for all your extra lives to be lost without the player character being destroyed once. Once all spare lives are lost, the player character must manually push the bomb.