Thunder Force IV is a horizontal shoot 'em up. The story takes place two years after the events of Thunder Force III. The player takes on the role of a fighter pilot to battle the Ohn Empire, which is plotting the extinction of the human race. The first four stages can be selected in any order. There are ten stages total. They scroll horizontally automatically, and the player can also explore up and down to scroll the screen vertically and reveal a larger playing field. The player can change the speed of their ship at any time for easier maneuverability. Scrolling up and down will reveal different waves of enemies the player can shoot down, as well as hidden power-ups. At the end of each stage is a boss, and sometimes there are bosses mid-stage.

Some enemies will drop power-ups that if picked up by the player will arm the ship with new weaponry, including a variety of missiles and lasers that fire in different patterns. Each weapon has advantages and drawbacks, and are more effective depending on the battle situation the player finds themselves in. The player can hold multiple weapons and cycle through them at will. Other power-ups include shields and satellite ships that revolve their ship and multiplies their firepower. Half-way through the game, the player gains a powerful "Thunder Sword" attack which deal massive damage to enemies. It requires that the player has two satellite ships.