R4: Ridge Racer Type 4 is an arcade-style racing game with a strong emphasis on powersliding around corners. Vehicles use one of two powersliding styles depending on the make of car selected: Drift or Grip. Drift cars require the player to tap the brake once while turning to initiate a smooth powerslide, while Grip cars require alternating between brake and accelerator while turning.

Vehicles are earned by playing through the game’s Grand Prix mode. Players choose one of four teams — R.C. Micro Mouse Mappy, Pac Racing Club, Racing Team Solvalou, or Dig Racing Team — each with a different difficulty level, and one of four manufacturers — Age Solo, Lizard, Assoluto, or Terrazi — which determines car style and powerslide type. In each race, the player must reach a qualifying position, with later stages requiring higher placements to continue. Depending on the qualifying position in each race, players receive either a new vehicle or an upgrade to their current one. Better cars are awarded for consistently higher finishes (e.g. the best cars are earned by placing 1st in every race, while lesser cars are obtained by only meeting the minimum qualifying positions). A total of 320 vehicles can be earned by completing the Grand Prix with every combination of team, manufacturer, and qualifying position; unlocking all 320 grants an additional car modelled after Pac-Man, for a total of 321.

The game also features a Time Attack mode (for achieving the fastest lap times) and VS. Battle (a two-player split-screen mode — the first in the home console series), as well as an undocumented PlayStation Link Cable mode that allows up to four players simultaneously. Players can also design their own car liveries and participate in Extra Trials against powerful prototype cars. The game is compatible with the JogCon peripheral and the PocketStation device, which allows players to trade cars with friends.

Another new feature was the Decal Edit mode, which enabled players to create their own custom logo for use on their vehicles.