Aside from the main quest, which involves fighting through each level and defeating the boss at the end in order to progress through the world map, players are encouraged to collect as much treasure as possible. Treasure can be obtained by defeating enemies, finding chests, digging through the environment, and finding note sheets that also unlock music tracks. Any money earned can be spent in villages on various items, such as upgrades to health and magic, secondary items sold by the salesman, and armor and shovel upgrades that grant bonus skills. While the player does have infinite lives, dying will cause the player to lose some of their money, though the player can recover it by collecting the flying sacks that appear around where the player last died. For an added challenge, players can also choose to destroy checkpoints to earn more treasure at the risk of being sent back further should they die.
Completing the game opens up a New Game Plus mode, which increases the overall difficulty of the game by doubling the damage Shovel Knight takes, as well as limiting the number of checkpoints in a stage, though the player retains any relics and health and magic upgrades collected during their first playthrough. There is also a password system allowing players to input codes to unlock various cheats.
There are some gameplay features unique to specific versions of the game. Both the Nintendo 3DS and Wii U versions allow players to use their respective touch screens to switch between secondary items without pausing the game. The Nintendo 3DS version features an exclusive mode known as StreetPass arena. This involves the player recording a short section of movement, with the goal of collecting as many gems as possible, which is then distributed to other players via StreetPass, where they can fight against that player's recorded character. Additionally, a Shovel Knight Amiibo figure, released on December 11, 2015, in Europe and January 8, 2016, in North America, allows players to unlock a co-op mode in the Wii U version, as well as challenge stages and customizable gear in Wii U, 3DS, and Nintendo Switch versions. Additional Amiibo figures based on Plague Knight, Specter Knight, and King Knight have been announced, which, along with the Shovel Knight Amiibo figure, also unlock in-game fairies that accompany the player in certain campaigns and an additional armor for Specter Knight. The PlayStation versions of the game feature an exclusive boss battle against God of War's Kratos, while the Xbox One and PC versions feature a fight with the Battletoads. In the Wii U version, the player could access Miiverse functions via the touch screen on the game-pad, though this feature is no longer available.
On January 11, 2017, it was revealed that the co-op feature, previously exclusive to the Wii U release, would become available on all platforms, excluding the Nintendo 3DS and PlayStation Vita.
Free post-release expansion DLC gives players additional campaigns starring different playable characters. These are available either as part of the Treasure Trove edition or as standalone titles. Expansions also contain additional challenges for Shovel Knight, co-op mode, and a mode that allows the player to choose the gender of major characters in Shovel of Hope, called Body Swap mode.
The first expansion, Plague of Shadows, puts players in the role of Plague Knight, who uses bombs in place of Shovel Knight's shovel. Players can customize the properties of Plague Knight's bombs by changing the casing, which affects how they are thrown; the powder, which affects what happens when they explode; and the fuse, which determines when they explode. By holding down the attack button, Plague Knight can perform a Burst move to launch himself in the air. Players can also unlock arcanas containing helpful spells by finding Shovel Knight's items and trading them with Chester the salesman. Additional items can be unlocked by collecting green coins hidden throughout each level. Plague Knight's levels are similar to Shovel Knight's, but his different and more technical moveset makes playing the game significantly different.
The second expansion, Specter of Torment, allows players to control Specter Knight who is able to briefly run up walls. When Specter Knight is close enough to an enemy, he can perform a diagonal slash launching him upwards or downwards, allowing him to reach new areas. Collecting red skulls hidden throughout each level can unlock Curios (items similar to Shovel Knight's relics) that Specter Knight can use.
The third expansion, King of Cards, features King Knight as its protagonist, who can use a bash attack and spinning jump to attack enemies and conquer obstacles. The campaign also features a strategic card battle mini-game, Joustus, with players able to acquire new cards as they progress and build their own decks.
The final expansion is Shovel Knight Showdown, a competitive fighting game for up to four players. Players compete to collect a set number of gems within a time limit or attack their opponents and attempt to deplete their health. Showdown features 20 playable characters, 30 battle arenas, multiple battle types, and a single player story mode. Showdown is not available for the Nintendo 3DS and PlayStation Vita versions due to their lack of local multiplayer functionality.