This game offers a chance to compete in one-on-one basketball with legendary NBA superstars like Michael Jordan (Chicago Bulls), David Robinson (San Antonio Spurs), Larry Bird (Boston Celtics), and even Patrick Ewing (New York Knicks). Every mode is multiplayer-capable in addition to being selectable for single-player gameplay.

Playing modes available to the players include: H-O-R-S-E, a free throw tournament, a shooting contest involving three-point shots, and a tournament where one NBA player will take on other NBA players for the ultimate prize. All fouls are called in this game; including minor fouls like goaltending. The winner of each match has a screen with a set of game statistics. Even the offer of a rematch is offered once a game is over.

Players are not chosen by name. Instead, they are chosen by their team (as of the 1991–92 NBA season). This will confuse fans who are unfamiliar of professional basketball from the late 1980s/early 1990s. Vital statistics related to gameplay are also included here like height, weight, the number of points that the player scores in a typical game, and accuracy in percentage for various shots.

The Dutch video game magazine Power Unlimited gave this game a 80% rating in its January 1994 issue while the website Sega-16 gave this game a 20% rating on April 30, 2009.

A sequel titled NBA All-Star Challenge 2 was released in December of 1993 exclusively to the Game Boy. Developed by Beam Software and published by LJN, most of the gameplay is largely the same, the main change being the graphics enhanced a bit from the originals Game Boy port.