In concept, Twisted Metal: Black is a demolition derby that permits the usage of ballistic projectiles. Players choose a vehicle and an arena—or a series of arenas in the story mode—to engage in battle with opposing drivers. A variety of weapons and upgrades are obtainable by pick-ups scattered throughout the stage. The objective of the game is to be the last one standing.

The basis of the plot follows the same structure as in all the previous games: Calypso runs a car-based contest called Twisted Metal (though in the game the contest is never called that), in which the various characters compete risking their lives to claim the tournament's prize - any single wish they desire, no matter the difficulty, rarity or even reality of such wish. Although Calypso is indeed malevolent, characters who have malevolent wishes (which make most of the cast) have their wishes granted without him tricking them on the wishes, while those seeking more noble ends (such as Outlaw's driver Agent Stone) find that Calypso usually has the last laugh.