In Ironsword, the hero of the series, Kuros, must face off once again against the evil wizard Malkil, who has taken control of the four elementals of the world—wind, water, fire and earth. Each of the four elemental realms consists of two stages. In the first stage, Kuros must find a golden artifact which belongs to the Animal King of the realm; once accomplished, the path to the second part of the realm will appear. In the second stage, the goal is to find the magic spell which can be used to fight the elemental boss. Without the spell, it is impossible to damage the boss. Once the elemental in each stage has been destroyed, Kuros obtains a piece of the legendary Iron Sword, which is needed for the final battle on Icefire Mountain.

This installment of the series introduces some new gameplay elements. Gems and keys still exist, although the former are used for monetary purposes and the latter can be used to open the many chests strewn throughout the game world. Shops that sell keys, food, spells, and special items can be found in each stage of the game world save the last two. Kuros can also gamble at a Pachinko-style game of chance in each shop, where the goal is to guess the path of a falling skull as it lands in one of four possible goblets. Also new to the series are magic spells which give Kuros special abilities for a limited period of time. Some spells can be used at any time, while others are only for specific situations.