Lost Labyrinth is a coffeebreak roguelike game, which means it can be completed in a short period of time. In this game, players explore a labyrinth and attempt to go through all of the levels of the dungeon. There are monsters scattered in different parts of the dungeon that players must slay. Players gain user experience every time a new dungeon level is reached. Character attributes are also increased with each new level. In each level, there are monster-filled hallways, mazes, treasure, traps, and a hidden portal that takes players to the next dungeon level.
Players start with a small labyrinth; as they advance, the labyrinth gets larger and more difficult. Players may encounter monsters blocking the way. The monsters do not move but must be slain in order for players to gain access to certain parts of the labyrinth. In addition to finding their way out, players must also collect the nine parts of the Staff of the Great Covenant that are hidden in different levels.
Lost Labyrinth has a multiplayer mode and can accommodate up to four players. Players can control characters using the mouse, keyboard, joystick, and similar controllers. Players can choose from a number of different characters, each with its own set of skills and survival strategy. Hit points and mana or spell points are recharged after a few minutes or when special areas of the dungeon are reached. Special levels to explore include an underground forest, a goblin cave, and a lava cavern.