Tibia is a two-dimensional tile-based MMORPG with text-based elements. It is set in an open fantasy world that uses pixel art graphics, an oblique projection, and a top-down perspective. The core gameplay involves killing monsters to receive loot and to gain experience to raise in levels. Early in the game, players choose between one of four unique vocations, each of which uses different spells and abilities. Players may complete quests to receive rewards, kill bosses to obtain rare items, fight other players, form guilds, buy and decorate houses or guildhalls, or spend time on idle activities like fishing, training skills, or role-playing with other players. Interaction with Tibia's NPCs is text-based, requiring the player to type keywords like "hi" and "trade" to interact with them, similar to many earlier text-based adventure games. Many of Tibia's quests and activities require a team of players, and players can speak to each other using the client's chat interface.

To play Tibia, players must create an account on the Tibia website, and then create a character. During character creation, players must choose between 68 different servers (called worlds) that vary by location, PvP type, and various other factors. They must also download the game client, and once their character is created, they may log into the game.

When first logging in, new players will find themselves on a tutorial island called Dawnport. There, they can test the controls, test out the game's four vocations, and begin exploring and killing monsters. Upon reaching level 8, players are directed back to the town to choose their permanent vocation that will last for the rest of the game. The four vocations are knight, paladin, druid, and sorcerer. Knights specialize in melee, paladins in distance fighting, sorcerers in offensive magic, and druids in healing magic. Once players choose their vocation, they will be permitted to take a ship to the mainland, where the rest of the game takes place. Once on the mainland, depending on the server's PvP type, players may be permitted to attack each other.

Tibia is an open world game that encourages exploration and discovery. Very little instruction is given once the player has reached the mainland, and the game is distinguished by its harsh penalty upon dying. Players progress in the game by upgrading their equipment, increasing their level, and completing quests to access restricted locations. Each level requires the player to accumulate more experience than the previous level, but unlike many other MMORPGs, Tibia does not have a level cap, so players are permitted to gain levels without limits