Monster Rancher Advance is a monster-raising simulation that allows players to raise and customize 440 monster types. These monsters can then be tested in in-game tournaments, or made battle against other players's ones in two-player mode (by the GBA link cable).

Monsters are created in the game's shrine through the entry of letters, numbers and punctuation symbols. Players begin with the ability to enter up to 4 characters to make monsters, and can unlock the ability to use up to 8 characters through gaining higher trainer ranks. Different words or combinations of characters can not only make different types of monsters, but also each monster can have varying attributes and characteristics, making each one unique.

Players then train the monsters by choosing which foods to feed them with, which drills to do to raise attributes, what training to send them to for learning new attacks, and what items to give them. The game starts with a modest amount of money with which food and items can be purchased; more money is earned in tournaments. Gameplay revolves around planning training sessions, adding new attacks and juggling the bank account, along with attempting to win tournaments. As monsters age, they can be added to a coaching staff to help raise new monsters to better attributes, or they can be combined with other monsters to make stronger babies. Monsters do not die in this game, however they do face an enforced retirement age.

There is a storyline, where some characters from older Monster Rancher games are back, and new characters are introduced. The gameplay itself, like most other Monster Rancher games, is open-ended.

The two-player mode, requiring the link cable and two copies of the game, allows players to test the monsters they have raised against each other. It also allows players to trade items and cash money, to wager items or cash on tournaments, and trade raised monsters bringing them into each others' game files.