The game does not run on a 32-bit engine, instead running on a new and updated engine highly similar to that found on Tekken 4. The console version ran on a highly updated engine, utilizing the PlayStation 2's graphics processor. These graphics ran using the Tekken 3 PCB board, based on the PlayStation hardware. The arcade version ran on a 32-bit engine, utilizing the graphics engine of Tekken 3. The arcade and console versions of Tekken Tag Tournament differ slightly. Also featured is the 'Tekken Bowl' mode, a bowling minigame where each character has different attributes.

The PlayStation 2 version added enhanced graphics and various modes, including 1-on-1 mode, in which players only choose one fighter each, and Team Battle, where players choose up to eight battles and play with the tag rules, with each new character replacing the one that was defeated (the remaining fighter must fight on his/her own). In addition, there is a boss character, Unknown, who is similar to Tekken 3 's Mokujin in that she can randomly imitate any character's fighting style at any time during the fight. The game features over 35 characters that previously appeared in Tekken 2 and Tekken 3. In the event of a timeout, the team with the most accumulative health remaining wins the round. series, players are defeated when only one of their fighters lose all of their health, requiring players to be strategic about tagging their fighters.

Unlike other tag games such as Capcom's Vs. At times when a resting fighter's lifebar is flashing, that character can be tagged in to be given a temporary boost in strength. The tag can be implemented in many ways, such as in between combos or utilizing special throws. At any point in the match, the player can hit a tag button to swap out with their other fighter, allowing the resting fighter to recover some lost health. Continuing the fighting mechanics from Tekken 2 and 3, Tekken Tag Tournament sees players battling in teams of two characters.

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