As an unnamed karate competitor (in white karate gi), players fight one-on-one point-based karate matches against a series of unnamed opponents (in red karate gi) using a variety of offensive and defensive moves (using combinations of both joysticks).
The game is known as the grandfather of the versus fighting game genre, influencing other fighting games of the 80s including Yie Ar Kung Fu, The Way of the Exploding Fist, and World Karate Championship (which Data East sued Epyx over for being too similar).
An updated version of the game, titled Karate Champ - Player vs Player (in Japan as Taisen Karate Dou) was released shortly after. This version updates the computer AI and controls while adding a new story element: both competitors fight for the heart of girls around the world.
The game was later ported to the Apple II and Commodore 64 on October 12, 1985 by Berkeley Softworks and published by Data East. It was also ported by Data East to the NES (in North America on November 1986) and the Famicom Disk System (in Japan on November 1988).