There are a total of seven stages varying from woodlands, wastelands, swamps, temples and cliffs. Each stage begins with the player slashing his way to the end, until he confronts a level boss.

The ninja is always armed with the sword Righteous Cloud which can be fluidly used to attack in all directions. Extra weapons include the Swirling Leaf (shurikens), the Bamboo Thunder (bombs), and the Rising Dragon (kusarigama). There are also several powerup items, such as one unleashing multiple ninja ghosts to assist the player.

The game's hero, Gekkou, is a young ninja who lost his father to a mysterious half-man half-beast creature. The plot of Ninja Spirit is based on the quest of his revenge in an alternative feudal Japan.