Manhunt is a third-person stealth horror game. The game consists of twenty levels, and four bonus levels that can be unlocked; the levels are referred to as "scenes". Players survive the Scenes by dispatching enemy gang members known as "Hunters", occasionally with firearms but primarily by stealthily executing them in gruesome, over-the-top ways.

The player is rated at the end of each level, primarily dependent on the gruesomeness of the killings and the speed of completion, from one (unimpressive) to five (extremely competent) stars. Executions are preferred in order to gain a higher score, thus encouraging players to play as viscerally as possible. The game's locales are full of "dark spots" and shadows where the player can hide while being chased by the Hunters; hiding in these dark areas makes the player invisible to opponents.

The game takes place in the gritty crime-infested Carcer City. The story opens with a female journalist reporting on the convict James Earl Cash, a criminal on death row who has supposedly been executed by lethal injection. Cash is awoken to the voice of a person coming from an earpiece, revealing that Cash was only sedated. Cash puts on the earpiece and the person, who refers to himself as "The Director", promises Cash his freedom before the night is over, but only if Cash follows the Director's instructions. Released in a dingy neighborhood, Cash is directed to slaughter his way through the streets, populated by a gang calling themselves The Hoods while the Director, watching through security cameras scattered throughout the city, repeatedly mentions the need to please the audiences, revealing his occupation as a snuff film director. However, despite the Director's promise of freedom, Cash is beaten and thrown into the back of a van by a group of mercenaries known as the Cerberus.

After his battle against the Hoods, he is also hunted by other violent gangs in various locations across the city. The gangs are organized by Ramirez, an ex-soldier and leader of the Wardogs, a gang of army veterans and experienced hunters. First, Cash is pitted against a gang of white supremacists known as The Skinz in a scrap yard. After that, faces off against Ramirez's Wardogs in an abandoned zoo where Cash has to save kidnapped members of his own family. Following the zoo encounter, Cash is forced to battle a gang of devil worshipers and perverts known as the The Innocentz in an abandoned mall. After retrieving a video tape in the mall and finding a VCR player, Cash witnesses his family being slaughtered by The Innocentz. Betrayed, Cash is forced to endure the humiliating task of escorting a drunken hobo through the hostile streets of East Los Albos. After finishing off the Innocentz in a derelict chemical factory, Cash takes on a gang of psychotics, known as The Smileys, who have taken over a mental asylum. Here, Cash survives the ending to the snuff film as planned by the Director. Consequently, the remaining Wardogs and Ramirez are hired to kill Cash. However, Ramirez and his gang are killed by Cash, and Cash quickly turns on the Director.