In Penetrator, the player flies a ship which can shoot forward and drop bombs. The first level is in open air, with just mountains to dodge, missiles which try to hit the ship, and animated radars. From the second level onward, the game is inside increasingly complex caverns, so the ceiling is also a danger, as well as new enemies. The missiles are now sometimes replaced with skulls that can move up and down, blocking the path.
The levels flow seamlessly into each other, signified by screen colour changes. After four levels there is a short fifth level where a base needs to be destroyed by dropping a bomb precisely, and then there is a firework animation as a reward. After all levels are finished, the ship goes back through reversed levels. The ultimate level results in an seemingly impassible landscape, however due to a bug if you accelerate into it you can get through but the game crashes shortly after.
There is an edit mode for designing levels and a training mode with infinite number of lives in which one can start from any level. Also, there is a simultaneous two-player mode. The game's sound consists of an uplifting theme before ship launch, while in-game there are shooting and explosion effects.