The story takes place on South Island, an island known for its abundence of treasure. One of these treasures are the Chaos Emeralds, six different gems with the power to bring life to all living things. One day the evil Doctor Robotnik lands on the island, in the hopes to destory his arch-nemesis Sonic the Hedgehog and find the Chaos Emeralds. Sonic hears about Robotnik's plans and goes to South Island to stop him. He finds that all the local animals have been turned into Badniks. Sonic then goes on to free all the captured animals and hunt for the Chaos Emeralds.

Sonic the Hedgehog is a 2D side-scrolling platformer. The only playable character (in the original release) is Sonic the Hedgehog. The goal of the game is to pass through several different levels, or as they're known here "Zones". Each Zone is comprised of three different "Acts". Each act has lots of enemies, terrains, and obstacles laid throughout them. For every enemy destroyed and item collected the player earns points that adds up to a final score. At the end of the second act there is a boss fight.

Sonic's main ability is speed. When momentum is built up Sonic can reach impressive speeds and blaze through the zone. His speed allows him to go through loops or up ramps that launch him high into the air.