The game world is essentially made of cubes arranged in a fixed grid pattern which represent different materials, such as dirt, stone, various ores, water, and tree trunks. While the players can move freely across the world, objects and items can only be placed at fixed locations relative to the grid. The player can gather these material blocks and place them elsewhere, thus potentially creating various constructions.

Minecraft has three currently available gameplay modes: Survival, Hardcore and Creative. Classic is the earliest free version and initially featured only the Creative game mode with only building (block placement and removal) aspects of the game and unlimited block supply. The game was then split into single-player survival mode (referred to as "Survival Mode Test"), which contained monsters and a much greater variety of blocks and items, as well as requiring players to mine their own blocks.

The game starts by placing the player on the surface of a huge procedurally generated game world. The player can walk across the terrain consisting of plains, mountains, caves, and various water bodies. The world is also divided into biomes ranging from deserts to snowfields. The in-game time system follows a day and night cycle. Throughout the course of the game the player encounters various non-human creatures, referred to as mobs. During the daytime, non-hostile animals spawn, which can be hunted for food and crafting materials. Hostile monsters, such as large spiders, skeletons, zombies and the dangerous exploding Creeper will spawn in unlit areas, such as in caves or during the night.
Complex systems can be built using the in-game physics engine with the use of primitive electrical circuits and logic gates. For example, a door can be opened or closed by pressing a connected button or stepping on a pressure plate. Similarly, larger and more complex systems can be produced, such as a working arithmetic logic unit – as used in CPUs.

The game world is procedurally generated as the player explores it. Although limits exist on vertical movement both up and down, Minecraft allows for an infinitely large game world to be generated on the horizontal plane, only running into technical problems when extremely distant locations are reached.[† 1][16] The game achieves this by splitting the game world data into smaller sections, called "chunks",[† 1] only created or loaded into memory when the player is nearby.