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Mario Party 4 is based on an interactive board game played by 4 characters from the Mario series, which are controlled either by the player or the game's Artificial Intelligence (AI). The game features 8 playable characters, although they do not have any different gameplay attributes from each other (save for favouring certain items when controlled by the AI^[3]). Players can arrange their characters into opposing pairs, or play independently in a battle royale.^[4] As with most board games, each participant takes turns in rolling a dice block (1 to 10) to determine the number of spaces moved on the board. A minigame follows each round of four turns,^[5] which yields a coin prize for the winner. A set number of these are required to purchase a star, with the victor being the character with the most stars at the end of the game.^[6] The length of a game can vary as the predetermined number of minigames is adjustable in multiples of 5. Stars are usually attained by purchase at the specific space on the board where it is set, with the star location changing to another space after every acquisition. Three extra stars can be obtained if "Bonus mode" is switched on, with a star each awarded to the player with the most minigames won, most coins collected, and most happening spaces visited.^[7] This mode also contains hidden blocks, which will grant either coins or a star when located and hit.^{[citation needed]}

Mario Party 4 features 6 boards, 5 of which take their name from a secondary Mario character, such as Goomba.^[8] The boards are themed to correspond with their titular character, and contain specialised features to reflect this such as the roulette wheel in the casino-based "Goomba's Greedy Gala". The on-board characters follow a set route, although this becomes optional when arriving at a junction.^[9] The boards also contain multiple "Events", which are generic stations placed on every board. These include "Lottery Shops", where money is gambled on item prizes, and "Boo Houses", where Boo is paid to steal either coins or a star from an opponent. The majority of spaces on the boards are denoted by either blue or red circles, with blue granting coins and red deducting them.^[4] Alternative spaces are also available, such as "happening spaces", which trigger an event exclusive to the current board. "Mushroom Spaces" grant the user either a "Mega" or "Mini" Mushroom—"Mega Mushrooms" extend the movement range while "Mini Mushrooms" curtail it. Additionally, giant characters will bypass "Events" and stars while reduced characters can access special areas on the board via pipes.^[1] Multiple other items can be bought from on-board shops, such as "Swap Cards", which exchanges items between 2 players.^{[citation needed]}

The minigames in Mario Party 4 are short, unrelated events with a specified objective that the players must attempt to meet to earn coins as a reward. Minigames are unlocked during the main "Party Mode", although they can be played outside of the game board context in "Minigame Mode".^[10] This allows the player to either freely play minigames; select which minigames they want, and control conditions for victory in a match, such as the "3-win-match"; or play 2 vs. 2 minigames to claim a space on a tic-tac-toe board. Minigames are split into 7 categories: "4-player", "1 vs 3", "2 vs 2",^[4] "Battle", "Bowser", "Story", and "etc.". The first 3 occur randomly after each set of turns during a party, while "Battle" can only be triggered by landing on the corresponding space on the board. Unlike regular minigames, the players must contribute their money and then compete to reclaim it or earn more by winning the minigame. There are also rarer groups of minigames, such as the Bowser minigames requiring the loser to forfeit items or coins and the mini games,^[1] which can only be accessed by characters reduced by the "Mini Mushroom". A set of minigames that cannot be played during normal conditions are located in the "Extra room", featuring Thwomp and Whomp.^{[citation needed]}

The game features a loose plot in that the player must progress through "Story Mode" to earn presents from the eponymous characters of the pertaining boards. These are presents that had been brought to the player's birthday party in the game,^[11] which must be completed by earning the most stars in a board game and subsequently defeating the present giver in a special one-on-one Story minigame. This is all contained within the "Party Cube", which grants the wishes of its users; the story's climax comes in the form of Bowser, who wishes to disrupt the party with his own board, hosted by Koopa Kid. Also, unlike its predecessor, Princess Daisy and Waluigi are now playable in Story Mode.