In 1-player mode, the gameplay is an arrangement of the Balloon Trip mode of Balloon Fight, where the screen automatically scrolls toward the left, while the player controls Alice that uses two balloons to float into the air with. To make her float in the air, the player must press (and sometimes hold) the A button to make her wave her arms to hover upward. Alice also has the ability to remove her balloons and walk on the ground, as well as jumping. If both of her balloons are popped or removed, and if she lands safely, she can inflate two new balloons and fly again.
The object of this mode is to travel from the beginning to the end while collecting balloons left by Alice's brother, Jim, along the way. The player must also prevent Alice from bumping into enemies that are attempting to pop her balloons, push her or kill her altogether. Some enemies, such as Balloon Birds, came from Balloon Fight. The giant fish that eats anyone who flies too close to the water, also came from Balloon Fight. There are four bosses in Balloon Kid. To defeat them, the player must make Alice fly about them and make her detach her balloons to bounce on them. She also can jump and stomp on them, whenever it is safe for her, like in other typical platformers.
The 2-player mode is loosely based on Balloon Fight's Game A and Game B modes, where one player battles against another player. One player controls Alice, while the other controls Alice's friend and eternal rival: Samm. The goal is to collect more balloons than the other player before they arrive at the end of the stage.
Balloon Kid's "Balloon Trip" mode is based on Balloon Fight's mode of the same name, but with Alice instead of a generic Balloon Fighter. Everything else, including the BGM itself, are unchanged from Balloon Fight's Balloon Trip mode.
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