The game was programmed by Alan Miller, who later cofounded Activision, with cover art by Susan Jaekel. The game was coded in assembly code.
As in the traditional game of Hangman, the player must guess the letter of a hidden word, with each wrong guess resulting in a piece being added to a gallows, with the game ending either when the gallows is completed or when the word has been fully guessed. The player can select from a range of four difficulty levels from first grade to high school. The words have a maximum length of six characters. Instead of the traditional man to be hanged being shown in the picture, a monkey is shown hanging from the gallows by its arm. Hangman contains 510 words divided into four difficulty levels. A timed mode where the player has to guess before a time limit expires is also available.
The game may be played in single-player mode, or in a two-player mode where the players play together. In one-player mode the player has 11 attempts at guessing before the gallows is constructed. In two-player mode, guessing may go on until one player wins.