Skyhammer takes place in the mid-21st century where power-hungry corporations rule the largest cities. The player is an employee of Cytox, a Skyhammer pilot that protects the corporate investments. The player undertakes a wide variety of missions in order to prove their ability and ensure Cytox's long-term revenues.
The game's look and gameplay resemble the earlier PsygnosisPlayStation release G-Police, as the game world consists of three huge Blade Runner-esque cityscapes. The player controls a flying craft in a similar manner to Descent and has to partake in a number of missions involving objectives to combat crime in the city. Throughout the game money can be earned through successful kills, which can be spent on ship upgrades.
There are two modes of play: Mission Mode and Battle Mode. The former allows the player to go on a variety of missions while upgrading the Skyhammer and claiming more territory for his corporation. The latter allows the player to fight endless waves of invading corporations. Both modes provide access to three unique cities, each with its own distinct layout and challenges.