Extreme Toy Race is a racing game that allows one or two players to take control of toy cars, trucks, vans and other vehicles in indoor and outdoor races in a virtual home. Its speedways include Zandvoort Speedway (a blue-themed kitchen and dining area), Monsato Speedway (a beach-themed outdoor spot with old wooden fencing, inflatables and sun umbrellas) and Pedralbes Speedway (a pink-themed bedroom with tables and moving boxes).
In Singleplayer mode, the player can choose between two types of races (Arcade and Time Trial). In Arcade mode, they must complete three laps and finish first against seven other toy vehicles. In Time Trial, they must reach the finish before time runs out. In Multiplayer mode, they can only participate in Arcade races.
Extreme Toy Race gives the player or players a choice of free vehicles. They can also unlock additional ones over time. All modes feature a realistic mix of toy and adult vehicle physics, drifting and skid marks. If a vehicle tips over, the game doesn't automatically tip it right-side up. Additionally, if the speedway involves tables or ramps, the toy vehicle can fall onto the floor below. At that point, the player can enjoy an open-world or exploration game until the end of the race or time.