Indiana Jones is back! The great archaeologist and adventurer has to solve a grand mystery once again, aided by his trusty whip, his sharp wit, and his courage. A man who calls himself Mr. Smith is interested in a certain ancient statue. When the unsuspecting Indy hands it over to the client, he finds out that Mr. Smith is in fact a colonel in the Nazi army! Why was he so interested in that statue? A girl who had once worked together with Indy, the pretty red-haired (and a bit troublesome) Sophia, tells him the whole thing must have a connection with the legendary lost continent Atlantis.

Gathering clues from all over the world, Indy and Sophia embark on their greatest journey! Fate of Atlantis is not a movie spin-off, but an independent adventure with a brand new story. The gameplay utilizes LucasArts' famous SCUMM system, with action verbs the player chooses from a menu; the objects that can be interacted with are highlighted.

The game contains many puzzles of various kinds (mostly inventory-based) and dialogues with multiple choices. There are also a couple of hand-to-hand fights against the Nazis. The middle part of the game can be played in three "modes": co-operation (Indy and Sophia), adventure (Indy alone), and action (Indy alone, with less puzzles and more action). In each mode there are different locations to visit, different puzzles to solve, and different characters to meet.